①To hold stocks or cash? Based on the views of various brokerages, it is generally believed that decisions need to be dynamically made in consideration of investors’ risk preferences; ②Regarding post-holiday market performance, brokerages collectively anticipate a 'strong start.'
Cailian Press, September 29 (reporter Chen Junlan) – On the second-to-last trading day before the holiday, the A-share market did not display its usual pre-holiday lull. Instead, driven by a collective rally in brokerage stocks, the market showed active performance with most major indices closing higher, and market trading sentiment showed signs of recovery. However, as the National Day holiday approaches, investors are once again faced with the classic dilemma of whether to 'hold stocks through the holiday' or 'hold cash to avoid risks,' with uncertainty and opportunity coexisting.
At this critical time window, Cailian Press reporters have compiled the latest strategy insights from eight brokerages including Galaxy Securities, CITIC Construction Investment, Open Source Securities, Huatai Securities, Yuekai Securities, Guosheng Securities, GF Securities, and China Merchants Securities across multiple dimensions such as stock-holding strategies, sector allocation, and post-holiday market outlooks.
The majority of institutions believe that the current market has entered a mid- to long-term value zone, and adjustments before the holiday may present a good opportunity for positioning. Overall, institutions are not pessimistic about the fourth-quarter market outlook, as structural opportunities remain promising.
Should one hold stocks through the holiday? Decision frameworks based on risk preference segmentation
On the core issue of 'holding stocks or holding cash,' after synthesizing the views of various brokerages, it is widely considered that dynamic decision-making should be based on investor risk preferences. Conservative investors can retain a core position, aggressive investors may allocate towards growth sectors, and novices are advised to maintain light positions while observing. The central logic revolves around 'risk-reward alignment.'
First, conservative investors: Focus on 'defense + policy,' with controlling drawdowns as the primary goal
Yuekai Securities suggests that such investors retain their core base positions, focusing on allocating low-valuation, high-dividend blue-chip stocks and policy-beneficiary sectors. Specifically, these include: first, high-dividend options such as banking, electricity, and transportation, with dividend yields generally above 3%, offering resistance to volatility; second, real estate-related chains (building materials, home furnishings) benefiting from pro-growth policies, where current sector valuations are at historical lows and policy catalysts provide room for valuation recovery; third, essential consumer goods like food and beverages, which demonstrate strong demand rigidity and can hedge against market fluctuations. It is important to avoid chasing thematic stocks and to keep individual sector allocations below 15%.
Guosheng Securities provides supplementary insights from the bond market perspective. Although the pre-holiday bond market faces short-term disturbances such as mutual fund fee reform and a seasonal rebound in September PMI, over the medium to long term, loose liquidity conditions and weak fundamentals remain the security blanket for the bond market. The pressure for 10-year government bond rates to rise post-holiday is limited, and conservative investors are advised to adopt a barbell-type allocation across the holiday, combining 'short credit/certificates of deposit + long-dated bonds.' Ten-year government bonds yielding above 1.8% offer attractive allocation value.
Second, aggressive investors: Allocate towards 'growth + oversold,' betting on post-holiday rebound potential
CSC Financial points out that holding stocks over long holidays during a bull market offers significant cost-effectiveness. If a post-holiday market rebound is anticipated, investors should focus on growth sectors with higher elasticity. Two key directions are currently noteworthy: Firstly, technology stocks (semiconductors, AI applications), which have a high probability of pre-announced Q3 earnings growth, compounded by the upward trend in the global semiconductor cycle and clear industry momentum. Secondly, sectors related to “new quality productive forces” (robots, intelligent driving). Tesla is set to hold a production meeting this week, which may clarify the mass production schedule for humanoid robots; domestically, Unitree Robotics is expected to launch its products by Q4 2025, with intensive industry catalysts. It is important to diversify holdings, with no single sector exceeding 20% of the portfolio, and set a 10% stop-loss limit.
Open Source Securities further refines opportunities within growth sectors, advising aggressive investors to focus on rotation opportunities within the technology sector, particularly undervalued areas beyond those that have seen significant gains such as optical modules, PCB, and innovative pharmaceuticals. Gaming, media, internet, Huawei supply chain (consumer electronics), and battery sectors show potential for catch-up gains. Observing recent capital rotation patterns, ETFs in new energy, robotics, and semiconductors have recorded substantial net inflows, with semiconductors and robotics showing the strongest capital absorption, reflecting a shift of funds from high-priced computing power to lower-valued growth sectors.
Thirdly, for novice investors: maintaining light positions and observing mainly, with ETFs being the preferred tool.
Yue Kai Securities emphasizes that inexperienced investors should maintain light positions before the holiday (not exceeding 30% of total portfolio) to avoid emotional trading. If participation in the market is desired, broad-based ETFs (such as CSI 300 ETF, STAR 50 ETF) or sector-specific ETFs (e.g., Semiconductor ETF, Consumer ETF) can be selected to reduce individual stock risks. The key decision factor will be observing capital flow trends in the last two trading days before the holiday: if northbound funds show significant net inflows and trading volumes continue to rise, positions can be increased moderately; if the market continues to decline quietly, it is advisable to remain on the sidelines and wait for clearer signals post-holiday before taking action.
Huatai Securities also recommends novice investors prioritize index-based tools. Huatai Securities believes that the potential profit-taking pressure on ChiNext and STAR Market sectors post-holiday will be relatively high, with individual stock volatility risks exceeding those of indices. Broad-based ETFs, on the other hand, can smooth sector rotation risks, making them more suitable for short-term deployment.
Higher probability of ‘positive start,’ with policy support and liquidity serving as key drivers.
Regarding the post-holiday market outlook, integrating perspectives from multiple brokerages indicates a higher likelihood of a ‘positive start.’ Reduced macroeconomic uncertainties, the opening of a policy window, and fund inflows are expected to drive market recovery. In a bull market environment, post-holiday gains tend to be more sustained, with notable resonance effects between Hong Kong and mainland China’s tech sectors worth monitoring.
Yue Kai Securities uses historical patterns as a core argument, reviewing A-share performance after National Day over the past decade. The Shanghai Composite Index rose in 7 out of 10 years, with an average gain of 2.3%, and fell in only 3 years (with the largest drop of 4.5% in 2018 due to the US-China trade war). Further analysis shows that if the market completed adjustments before the holiday (e.g., April 2022, October 2018), the post-holiday recovery momentum was stronger. Data from the past five years reveals that if trading volumes in the last three trading days before the holiday increased compared to the previous week, the probability of post-holiday gains rises to 80%. Last week, trading volumes consistently exceeded RMB 2.3 trillion, signaling early fund positioning.
CSC Financial highlights the differences between ‘bull market’ and ‘non-bull market’ scenarios. Research shows that the probability of cumulative gains over the five trading days following National Day in A-shares is 60%, but in bull market years, the proportion of ‘five consecutive positive cumulative gains’ rises to 66.67%, while in bear market years, it drops to 25%. Taking specific years as examples, in the bull markets of 2015 and 2020, the cumulative gains of the Shanghai Composite Index on the fifth trading day post-holiday reached 6.87% and 3.55%, respectively, with gains lasting over one month.
For Hong Kong stocks, CSC Financial also provides an optimistic outlook. Over the past decade, the Hang Seng Tech Index has shown a 72.86% probability of rising in the seven trading days following National Day, significantly higher than the 65.71% probability for the Hang Seng Index. In A-share bull market years (2017, 2019, 2020), the cumulative gains of the Hang Seng Tech Index on the seventh trading day post-holiday were 2.49%, 3.85%, and 5.18% higher than those of the Hang Seng Index, forming an ‘A-H Tech Resonance’ scenario.
Kaiyuan Securities supplemented from the perspective of mainline continuation that the probability of a market theme switch or continuation around the National Day holiday is similar, but technology-related themes (such as fintech, TMT, and domestic substitution) are more likely to continue across the holiday period. The core rationale lies in the three medium- to long-term advantages currently held by the technology sector: first, relative profitability regaining prominence; second, overseas market linkages providing support; third, the upward resonance of the global semiconductor cycle. These three factors will sustain the continuation of the technology theme after the holiday.
Huatai Securities further clarified the value of the post-holiday window period: the October Politburo meeting, the Fourth Plenary Session, and overseas AI company earnings reports will provide clear guidance to the market, with technology and pro-cyclical sectors likely emerging as two major themes. From a calendar effect perspective, the average gains and win rates for A-shares in the five trading days following the holiday are relatively high, with small-cap stocks outperforming large-cap ones. In terms of trading volume, there is a significant increase in average turnover during these five trading days, reflecting stronger investor participation willingness. Sectors such as growth, and post-real estate cycle industries (automobiles, home appliances) are expected to show notable elasticity.
