Foreign selling of Taiwan stocks exceeds record high: How should investors respond?

Recently, the Taiwan stock market ushered in a surprising news - foreign investors oversold and hit a record high, with sales exceeding 96.6 billion yuan. According to a report from News Cloud , as of the latest data, the amount of overselling by foreign investors in the Taiwan stock market has reached an unprecedented high. This not only caused market shocks, but also caused many investors to panic. The overselling behavior of foreign investors was mainly concentrated In technology stocks and financial stocks, the performance of these stocks directly affects the overall market trend.

1. The background and reasons for foreign capital selling

First, we need to understand the background and reasons for foreign capital selling. The operations of foreign capital in the Taiwan stock market are affected by the global economic environment, including changes in U.S. monetary policy, the reorganization of global supply chains, and international geopolitical risks. Recently, the U.S. Federal Reserve is preparing to cut interest rates, causing global capital to flow into U.S. dollar assets. This has put other markets, including Taiwan stocks, under pressure from capital outflows.

2. The impact of overselling by foreign capital on the Taiwan stock market

The impact of overselling by foreign investors on the Taiwan stock market is multifaceted. First, large-scale selling of stocks by foreign investors will cause stock prices to fall, especially those of value stocks. The decline of these weight stocks will further drag down the market index, causing market panic to intensify. In addition, the withdrawal of foreign capital will also affect market liquidity, reduce market trading volume, and further increase the risk of stock price fluctuations.

3. Suggestions for investors to deal with overselling by foreign capital

Faced with foreign capital selling exceeding record highs, how should investors respond? Here are some suggestions:

1. Stay calm and avoid following trends : market fluctuations are an inevitable part of the investing process. Investors should remain calm and not blindly sell stocks due to short-term market fluctuations. Especially for company stocks with good fundamentals, we should adhere to a long-term holding strategy.

2. Pay attention to fundamentals and choose high-quality stocks : During periods of greater market volatility, investors should pay more attention to the company's fundamentals and choose stocks with stable profitability and good growth prospects. These high-quality stocks are often able to rebound quickly after the market stabilizes, bringing investors generous returns.

3. Diversify investments and reduce risks : Investors should adopt a diversification strategy and avoid concentrating all their funds on a few stocks. By diversifying investments, the risks caused by fluctuations in a single stock can be effectively reduced and more stable investment returns can be achieved.

4. Regularly review the investment portfolio and adjust strategies in a timely manner: Investment is a dynamic process. Investors should regularly review their investment portfolios and adjust investment strategies in a timely manner based on market changes and personal financial goals. For example, when the market fluctuates greatly, the cash ratio can be appropriately increased and the allocation of risky assets can be reduced.

5. Increase the price at the low point and keep entering the market at any time : the low point here refers to the retracement of at least 20%. Judging from the recent high of 24,400 in the Taiwan stock market, it means entering the market at around 20,000 points. The overall trend is that the daily line is almost in a downward trend, and the weekly line has slightly broken through the lower support.

4. The importance of long-term investment

Although the short-term overselling of domestic and foreign capital may put some pressure on the Taiwan stock market, in the long term, market fundamentals and economic growth are still the main factors that determine the trend of the stock market. As an important base for the global technology industry, Taiwan has many internationally competitive companies and its economic fundamentals remain solid. Therefore, investors should maintain confidence in the Taiwan stock market and adhere to a long-term investment strategy to obtain better investment returns.

5. Conclusion

In short, the overselling of foreign capital to a record high has indeed brought considerable challenges to the Taiwan stock market, but this does not mean that investors should lose confidence in the market. Rather, this is a time to remind us to invest more cautiously and rationally. Through strategies such as staying calm, focusing on fundamentals, diversifying investments, and reviewing portfolios regularly, investors can better respond to market fluctuations and achieve solid investment returns.