Market Overview - A-shares experienced a collective decline for the second consecutive trading day, but the main indices have still seen an overall increase of over 10% since the beginning of the year, with the Shanghai Composite Index up 13.42%, the Shenzhen Component Index up 15.14%, and the ChiNext Index up 19.51% [1] Recent Market Trends - The Shanghai Composite Index has been in a sideways adjustment since the significant drop on August 27, following a peak of 3888.60 on August 26. The market has struggled to break through previous highs, with increased volatility noted since September [3] - Trading volume has contracted, with daily transactions not exceeding 3 trillion yuan since the drop on August 27, indicating a cooling of trading enthusiasm [3] Market Sentiment and Capital Flow - The recent market fluctuations are attributed to technical adjustment needs, as profit-taking pressure has built up after continuous gains. The market is currently characterized by a "risk-averse and shrinking" capital environment, with a notable net outflow of 1720.68 billion yuan on September 2 [5] - International market conditions, including rising expectations for a Federal Reserve rate cut in September (with a probability of 92%), have also contributed to the weak performance of U.S. stocks, further impacting A-shares [6] Investment Strategies - In the current market environment, a strategy of "balanced allocation and performance focus" is recommended [8] - Emphasis on the technology sector, particularly sub-sectors with strong performance support and policy catalysts, such as the gaming sector (benefiting from record-high license approvals) and semiconductor equipment (accelerating domestic substitution) [9] - Importance of defensive asset allocation, with gold and other safe-haven assets expected to perform well during market volatility, especially with international gold prices reaching historical highs [10] - Suggested to control positions between 30% to 60% and maintain flexibility to respond to market fluctuations, while constructing a portfolio that includes technology, consumption, and cyclical sectors [11]