Currently, we are in the early stages of a bull market. So, what is a bull market? Simply put, a bull market refers to a period when the market continues to rise, much like a bull pushing prices higher with its horns. However, even in a bull market, prices do not only go up; there will be two to three significant adjustments during the entire upward cycle. This is akin to occasionally taking a few steps back while climbing to regain strength for another upward charge.
In this process, there are three points to understand:
1. Bringing in new investors: The market's decline reflects that the previous phase of growth has become somewhat exhausted, and the market needs new investors to drive the next round of increases. These new investors are typically attracted to the market by the previous rise and subsequent explosive growth, and their participation can help the market regain momentum.
2. Declines for better increases: Adjustments in a bull market are actually part of the healthy development of the market. They filter out indecisive investors, allowing more steadfast investors to acquire more shares at lower prices. This is what we commonly refer to as a 'washing out' phase; washing out is meant to allow the market to regroup its strength, preparing for a larger increase in the next round.
3. Acquiring more shares: In the financial market, money doesn't really disappear; it merely shifts from one party to another. The market's decline provides steadfast investors the opportunity to buy in at lower prices, accumulating more shares. Therefore, for us, every decline in a bull market is a good opportunity to gradually increase our positions.