The current actual holding levels of the securities investment portfolios in this column for short-term, medium-term, and long-term are 75%, 50%, and 35% respectively, with market outlooks categorized as bearish, notably bearish, and notably bearish. Yesterday (15th), it was mentioned that hedge funds' net long positions in U.S. stocks have dropped to historical lows, indicating they no longer view the market outlook as favorably as before. Although their views on future market performance may not necessarily be accurate, it must be understood that these market participants possess highly sophisticated abilities in analyzing market conditions and judging future trends, so their strategic positioning should not be taken lightly. Additionally, the market generally expects U.S. inflation to fall back to a normal and acceptable level for the U.S. Federal Reserve only after one and a half to two years. Do you really believe that U.S. stocks can maintain continuous strength, keep fluctuating upwards, and repeatedly reach new highs during this period? Objectively speaking, if significant corrective movements occur during this time, it would actually be normal; whether the medium-to-long-term uptrend reverses should be our greatest concern.

From another perspective, the recent continuous rise in long-term U.S. bond yields has led many bond investors to abandon long-term bonds, shifting instead to short-term bonds or seeking other investment instruments for asset allocation to avoid risks. Commodities, precious metals, and cryptocurrencies will certainly be on their list of options, but stock allocations are unlikely to decline significantly, especially when market conditions show substantial corrections, offering higher value-for-holding ratios than current levels. The aforementioned positioning of U.S. stock hedge funds reflects their anticipation of a significant market correction; at that time, we should carefully observe whether their net long positions will significantly rebound. As Hong Kong stock investors, it is foreseeable that the overall market will follow U.S. stocks downward, but we hope Hong Kong stocks will show relatively smaller declines, followed by relatively larger rebounds, thereby increasing the opportunity for improvement in the situation where Hong Kong stocks have significantly lagged behind U.S. stocks. Of course, expecting Hong Kong stocks to outperform U.S. stocks over the medium-to-long term may not be easy, and investors should avoid over-holding. Chief Advisor of Economic Information and Trading Services, Leung Yip Ho (Website: www.BennyLeung.com)

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