Core Viewpoint - The article discusses the phenomenon of "contraction" in both ends of the barbell strategy, highlighting the extreme situation of dividend assets and the implications for investment strategies in the current market environment [4][8]. Group 1: Barbell Strategy and Market Trends - The barbell strategy has gained popularity recently, but research indicates that both ends of the strategy are experiencing a contraction [4]. - A report from Guolian Minsheng Securities notes that the contraction of high-dividend assets has reached a historical extreme, suggesting that focusing solely on high-dividend bank stocks may yield the highest returns among various dividend asset allocations [4]. - Huabao Securities reports that micro-cap stocks are experiencing "three highs," including a record high index, increased trading volume, and a sustained high annualized discount rate [4]. Group 2: Indicators and Risks - The "contraction indicators" for both dividend and micro-cap stocks have reached historical highs, indicating an extreme level of contraction in both ends of the barbell strategy [4][6]. - When the "micro-cap contraction indicator" is high, trading volume for micro-cap stocks tends to increase, suggesting a peak in trading sentiment that requires liquidity support to maintain momentum [6]. - Historical data shows that after reaching "three highs," micro-cap stocks have faced significant drawdowns, with maximum declines of 22.94% and 23.47% in previous instances [6]. Group 3: Implications for Dividend Assets - For bank stocks, the main concern affecting their allocation value is the reduction in cost-effectiveness rather than liquidity or sentiment [8]. - Historical trends indicate that when the price of bank stocks rises and the yield spread narrows to around 2.5%, it often triggers significant market corrections [8]. - The article suggests that the current contraction can be interpreted as a form of "herding," where investors seek certainty in uncertain times, reinforcing similar trading behaviors [8].