1. This Month's Gains Came Mostly from Valuation
Breaking down the sources of this month's market gains: EPS contributed little, while valuation expansion accounted for the bulk. This is a classic "expectation-driven" rally—the upside is quick to materialize, but the downside is a lack of fundamental support.
Such a rally has a hidden prerequisite: the market needs a steady stream of new stories to sustain expectations. Once the narrative breaks, valuations contract.
2. What I Will Do
Don't chase highs, don't pile into hot names. For positions already held with stable fundamentals, continue to hold. For new hot themes driven purely by expectations, stay on the sidelines.
Maintain cash reserves. After an expectation-driven rally, whether it continues or reverses, there will be better entry points.
On investment analysis, market insight, and asset allocation — not chasing short-term noise, but understanding what truly drives long-term returns.
