As the year draws to a close, many investors are looking ahead to 2026, anticipating a potential spring rally and questioning whether the current slow-bull market's long-term uptrend will persist. In my view, the A-share market's breakthrough past the 4,000-point mark in 2025 confirmed the establishment of this prolonged slow-bull market. The 4,000-point level is not the peak but rather the starting point of a new upward cycle.
While 2025 saw a highly fragmented market—with tech stocks dominating, banking stocks hitting record highs amid demand for stable returns, and many other sectors underperforming—some investors have cast doubt on this bull market. Even with the benchmark index reaching 4,000 points, skepticism remains. However, it is now clear that this slow-bull market will continue, potentially lasting two to three years, or even three to five years. Given its gradual nature, the pace of gains will remain measured, with annual index growth typically ranging between 10% and 20%. Such a steady uptrend is more conducive to investor returns compared to rapid or speculative bull markets, where sharp corrections often follow swift rallies, leading to significant losses.
Chinese investors have long hoped for a decade-long slow-bull market akin to the U.S. stock market, enabling steady wealth accumulation. The current bull run began favorably following last year’s "September 24" policy shift, which set the stage for this sustained uptrend. The market has now entered its third phase:
1. **Initial Surge**: The "September 24" policy pivot triggered a rapid rally, with the benchmark index surging nearly 1,000 points in just four trading sessions, laying the foundation for the bull market. 2. **Sector Rotation**: After a period of consolidation, the humanoid robotics sector emerged as a key driver in Q1, fueling tech stock momentum. By late June, the second wave pushed the Shanghai Composite Index past its October 8, 2024 high of 3,670 points, eventually surpassing 4,000 and entering the bull market’s second phase. 3. **Broadening Rally**: The current transition into the third phase is expected to accelerate sector rotation, with more industries participating beyond just tech.
Thus, 2026 may see this structural bull market evolve into a broad-based rally. Sectors like new energy, consumer goods, defense, and non-ferrous metals could join tech in driving gains, deepening market participation and improving investor returns. A genuine bull market should benefit most investors and sectors.
Recent high-level meetings, including the Politburo and Central Economic Work Conference, have outlined proactive macroeconomic policies and deeper capital market reforms for 2026. CSRC Chairman Wu Qing reiterated efforts to attract long-term "patient capital" in a *People’s Daily* op-ed. A thriving capital market is vital for China’s financial strength and consumption growth, potentially serving as a "fourth engine" of economic expansion. The current market consolidation presents an opportunity to position for 2026—confidence and patience are key. Even tech stocks’ recent profit-taking is a normal correction, not a signal of the rally’s end.
In 2026, innovation-driven sectors—humanoid robotics, semiconductors, AI, solid-state batteries—will remain core investment themes. Meanwhile, undervalued consumer blue-chips may see valuation rebounds. Their profitability, far exceeding manufacturing returns, makes them attractive for long-term holdings, especially given stable dividends. Many now classify high-dividend consumer stocks (e.g., premium liquor) alongside low-PE, high-yield sectors like banking and utilities.
The shift of household savings into capital markets is expected to accelerate in 2026. With over RMB 165 trillion in deposits (and growing), channeling these funds into productive investments is crucial. In 2025, over 25 million new stock accounts were opened (averaging 200,000+ monthly, peaking at 300,000), while mutual fund sales rebounded sharply, with equity funds exceeding RMB 1 trillion in issuance. As investor confidence grows, more savings will likely flow into equities, boosting market liquidity.
With the golden era of real estate investing behind us, the capital market’s time has come. Missing this opportunity would mirror missing the property boom two decades ago. Success requires disciplined investing—avoiding speculative trading, embracing value principles, and capitalizing on market dips in quality companies. Historically, many lose more in bull markets than bear markets due to reckless chasing of rallies. Breaking this cycle demands rational strategies tailored to China’s market dynamics.
This slow-bull market offers an extended window for gains. 2026 is poised to be a year of significant potential.
*MACD golden cross signals are forming, with select stocks showing strong momentum.*
*Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence.*