Market Overview - The market experienced significant volatility, with the Shanghai Composite Index dropping over 1% before recovering to gain over 1%, while the ChiNext Index rose by 3.82% [1] Key Points of Divergence - The first key point of divergence is the historical resistance level of 3900 points for the Shanghai Composite Index, which has not been sustained since 2015. This level is psychologically significant for investors expecting a "slow bull" market. A breach of 3900 points could lead to a push towards the 4000-point mark, often seen as a signal for accelerated market activity. Profit-taking from investors who have gained from lower levels, particularly those who entered below 3000 points, is expected to increase, leading to intensified market fluctuations around this level [2][3] - The second divergence involves a leading liquor company's market valuation, which has been impacted by the stock price movements of a leading chip company. When the chip company's stock briefly surpassed the liquor company's, it triggered a market pullback [2][3] Valuation Dynamics - The market's valuation logic is influenced by the "valuation anchoring effect" associated with the liquor company. When new high-value stocks surpass the liquor company, it prompts a reevaluation of valuations, as the new stocks often rely on high growth expectations that have yet to be validated. This leads to profit-taking and increased market divergence, resulting in temporary market fluctuations [3] Investment Strategy - In the current market environment, focusing on dividend-paying stocks is advisable as they provide a "safety cushion" amid volatility. The high-growth sectors, particularly in communications, have been the driving force of the current bull market. The stability of dividend stocks complements the high growth characteristics of tech stocks, creating a "barbell strategy" that allows investors to benefit from growth opportunities while securing a stable income [4] - The Guotai Dividend Smart Selection fund is introduced as a quant-driven product that balances between "value dividends" and "growth dividends." The fund aims to maintain a balanced portfolio to avoid significant underperformance even in a rising market. It may also include high-yield Hong Kong stocks to capitalize on that market's performance [5][6] Performance Metrics - The Guotai Quantitative Strategy has shown strong performance since its transformation into a quantitative long-only product at the end of 2018, outperforming benchmarks and the CSI 300 Index across multiple periods. For instance, the fund achieved a return of 14.40% over the last two years and has consistently outperformed the CSI 300 Index over the past five years [6][7]