The 1st Anniversary of A-Share's 924 Ral

The 1st Anniversary of A-Share's 924 Rally: Market Dynamics, Contrarian Insights, and the Outlook for a Slow Bull

 

A year has passed since the landmark "924 Rally" in China's A-share market—a turning point that not only marked the end of a prolonged bearish phase but also reshaped investor sentiment. For market observers, this anniversary offers a chance to reflect on the forces that drove the rally, the lessons from contrarian positioning, and the potential trajectory of the A-share market in the years ahead. Beyond individual profit stories, the 924 Rally's true significance lies in its illustration of market cycles, human nature, and the long-term value of patience in volatile markets. Before the 924 Rally, the A-share market was mired in a protracted downturn; since peaking in 2021, it had declined for over three years, with the period from May to September 2023 characterized by relentless, gradual drops—dubbed "a blunt knife cutting flesh" by investors—that eroded confidence and fueled widespread despair. Against this backdrop, the 924 Rally emerged as a pivotal inflection point, not just a short-term rebound but a signal of a broader shift: market sentiment moved from extreme pessimism to cautious optimism, capital flowed back into undervalued sectors, fund portfolios focused on "relative returns" began to slightly outperform benchmarks, and overseas asset allocations gained traction as a risk-diversification tool, while for equity investors, the rally brought a sharp reversal—most stock gains in the post-924 period concentrated in the first three months, though volatility remained far higher than in fixed-income or index-linked products. The period leading up to the 924 Rally highlighted a timeless market principle: extreme pessimism often precedes market bottoms. As the market languished in mid-2023, mainstream sentiment was overwhelmingly bearish—investors questioned the market's viability, dismissed bullish outlooks as "outdated" or "naive," favored cash over equities, and echoed expert claims that "a weak economy cannot support a stock market rally." Yet contrarian voices, rooted in historical patterns, argued otherwise, pointing to parallels with Hong Kong's 2022 market bottom, noting that "market pendulums always swing back" and that "buying in bad times, not good times" is the cornerstone of long-term returns. This view was vindicated post-924: those who accumulated positions during the downturn benefited from the rally, while "right-side traders"—who waited for clear upward trends—often missed the initial surge or were caught in late-cycle corrections, such as the September-October 2023 pullback, underscoring why profitable investing remains a minority pursuit: it requires going against human nature, resisting fear at the bottom and greed at the top, and the pre-924 period's pessimism, in hindsight, was a classic "buy signal" masked by emotional bias. A year on from the 924 Rally, the A-share market stands at a crossroads; while concerns persist—like short-term stock volatility and debates over sectoral trends, such as tech versus traditional consumer sectors like liquor and TCM—the long-term outlook leans toward a slow bull market, driven by key factors: a large number of value-oriented stocks (many linked to economic fundamentals) remain at historical lows, and once economic data rebounds (either directly or in anticipation of recovery), these sectors could drive index gains, potentially pushing the Shanghai Composite Index to new all-time highs, though the process will be gradual, with "quick surges" unlikely as stability and sustainable growth take precedence; skepticism about economic prospects lingers, but market cycles suggest a turnaround is inevitable, as the post-924 stock rally and advances in high-quality tech development are expected to feed into broader economic growth over time, guiding investors to align portfolios with recovery-benefiting sectors without chasing short-term trends; and the post-924 period has reinforced the value of diversification, with successful portfolios likely combining equity positions in undervalued sectors for growth potential and balanced fund allocations (including overseas assets) for "relative returns" and risk mitigation—a "dual-leg" approach that avoids overexposure to volatility and aligns with the slow bull's focus on consistency over speed. The 924 Rally's first anniversary is not just a celebration of past gains but a reminder of market fundamentals: cycles repeat, human nature remains unchanged, and patience trumps speed. For investors navigating the current landscape, the key takeaways are clear: ignore short-term noise, avoid chasing sectoral fads like the "tech vs. old-economy" debate, and focus on undervalued assets with long-term potential. Investing is a marathon, not a sprint; the gains from the 924 Rally were built on months of patience during a downturn, and future gains will depend on the same discipline, so as the market moves toward a slow bull phase, those who stay grounded in historical patterns and resist emotional impulses will be best positioned to capitalize on the next cycle of growth.