Warm Steel City: This type of Stocks/ETF is the first choice for bottom fishing in a falling market!

After a panic sell-off, what mistakes can retail investors avoid?

What typical behaviors should retail investors avoid? I think in times of panic, it might be a delay in selling stocks? Or buying too much when averaging down? Or starting too early? These are typical issues retail investors might consider.

For example, $Hang Seng Index(800000.HK)$ When it fell from 24,800 points to 23,000 points, it was seen as very cheap and bought, though sometimes there is reluctance to stop the loss.

Cutting losses is one method, and controlling position size is also a method. Usually, in a bear market, bottom fishing should be conservative and stable, unless going all-in is acceptable in the long run.

To put it simply, if I have 100 dollars, I can first buy 20 dollars worth of stocks. If the price drops another 5 to 10%, I can add another 20 dollars. It should be relatively easy to get back to the break-even point. Unless there are significant issues with that stock, it shouldn't be a problem.

If wanting to bottom fish in a bear market, what should be bought?

In a Bearish market, the primary choice is to select Stocks that are profitable. Both Hong Kong Stocks and USA Stocks are acceptable.

What to pick? Buy Blue Chip Stocks, buy domestic Technology Stocks, all are worthwhile.

For large Technology Stocks, I use Tencent as an example. $TENCENT(00700.HK)$ Tencent has been listed for over 20 years and has experienced many stock market crashes. From high growth to a slowdown, if it drops significantly, and if the holding period is long, it is possible to Buy in stages and gradually accumulate, which can also lead to a slow recovery.

Buying Stocks after a major market drop requires ensuring that some of the purchased Stocks will benefit when the market improves. There are some Stocks that performed well in the past but are not doing well now or recently, for example, $MEITUAN-W(03690.HK)$ , previously priced at 200 to 300 yuan, has recently weakened, and struggling to rise above 100 yuan. Clearly, many Stocks are on the rise, but it cannot keep up. In such cases, diversifying investments can be a choice, not just buying one, but possibly buying several.

Of course, if the principal is insufficient and only a few Stocks cannot be purchased, it’s simple: Buy some ETFs, as they encompass a wide range, and a rising market will surely benefit you.

Is the USA Stock market a choice for Technology Stocks? The S&P 500 Index in the USA stock market is an option. Buffett also encouraged everyone to Buy. $SPDR S&P 500 ETF(SPY.US)$ ， $Vanguard S&P 500 ETF(VOO.US)$ Buffett has bought before. Although earlier, he liquidated his positions in USA ETF.

If the market further stabilizes, consider buying some Technology Stocks, such as the seven technology giants. $iShares Semiconductor ETF(SOXX.US)$ It's all a choice, and the returns are quite good.

Is investing in USA Bonds worthwhile?

After 2024, $iShares 20+ Year Treasury Bond ETF(TLT.US)$ A double bottom has formed, what price level can be considered?

If Trump can move money from the stock market to the bond market, then USA bonds could rise significantly.

Because it is still expected that interest rates will decrease by another 0.1%, the last high was over 90, near 100 dollars, so a rise to 100 dollars would not be surprising. If there is quantitative easing, it is believed it will surpass 100 dollars.

Buying bonds serves two purposes: receiving interest and speculation on prices, with short-term trades and long-term trades. The entry threshold for USA government bonds is low, and TLT pays dividends monthly. However, one drawback of bond ETFs is that the USA government collects dividend taxes, but trading TLT through Futu avoids withholding tax on dividends.

There are many options for bond investments, aside from USA government bonds, there are also many corporate bonds. I believe there are investment options in a down market.

Can we create some inverse ETFs? Even in a bear market, bull-bear certificates might be an option?

If there are products that are considered bearish, it is strongly recommended to consider them after a rebound has occurred, rather than waiting until after a drop of over 20%. It doesn't matter if the prediction is wrong, but if caught in a squeeze, it can be difficult.

There are no set rules for how much to wait for a rebound, such as reaching the top of the Bollinger Bands, waiting for a period of rebound before considering bearish options.

The volatility of USA stocks is significant, and from a profit perspective, trading in inverse products is relatively easier, with great depth and many product choices – there are plenty of Bearish 3x leveraged ETFs for USA stocks. VIX can also be bought and sold, offering many options.

It is not impossible to short Hong Kong stocks, but you might own stocks yourself (Hong Kong stocks), would you sell your own stocks? It might be better to do so on the other side. This is how it is thought.