Before talking about this amazing strategy, today I will talk about the theory of the business cycle, hoping to give you some new perspectives.
Let's look at the conclusion first, the current situation, the country is likely to be in a depression period and did not run....
Traditionally, economists have grouped the business cycle into four phases:
Recovery: This is when economic activity rises, unemployment falls, and is strong;
Boom;Economic activity is at its peak, unemployment is at its lowest, inflation is rising, and ** is strong;
Recession;The economy is slowing, unemployment is rising, and bonds are performing strongly;
Depression;Economic activity is at the bottom, unemployment is at its highest, deflation, and bonds are strong;
Why is it more likeThe fourth stage is the depression period, because of the current downturn in the domestic economy, the unemployment rate, as well as the **, the bond performance is very good, but the ** performance is extremely poor, basically all right
And the U.S. stock market and overseas markets have taken the leadThe first or second stage - the recovery period and the boom period, ** Fierce performance.
Wait for the future A-shares to successfully enter the next stage and arriveRecovery period, then the market will naturally improve.
As for how long the depression will last in the country
The Great Depression in the United StatesBeginning in 1929 and lasting 10 years, during the Great Depression, the unemployment rate in the United States was as high as 25%, and GDP fell by about 30%.
The Great Recession in Japan,After 1990**, it took 10 years for GDP growth to stagnate completely.
These two times are considered more serious.
A shares, the shorter one is the 08 crisis, almost a depression of 4 5 years, 15 years, depression years.
The above two rounds in China are not strictly depressed, because there has never been deflation before...
This time, yesDeflation, unemployment, house prices and stock prices**, deep aging.
Obviously, it has really entered a depression.
As for when to get out of the depression.
This recession period is characterized by the fact that valuations have bottomed out first, and all valuation percentiles have fallen to zero.
Japanese and U.S. stocks, on the other hand, lost mainly valuations in the first decade of the recession.
The fundamentals are damaged, but not much.
So now, even if the valuation bottoms out during the depression, A-shares should have an opportunity.
As for the depression that has lasted for 1 2 years, but how long will it last?
The Federal Reserve has officially started to cut interest rates, which may speed up the process of lifting the depression.
Or in the depression, at least let A-shares have a swing small bull market.
I think there will be a greater possibility of a 24-year interest rate cut window.
But don't completely expect people to cut interest rates, there is endogenous growth, otherwise it will only be a phased ** at most.
Of course, you can be wrong in my reasoning.
After all, the economic cycle is, in fact, the hardest
Is there a strategy that can make money in every economic cycle?
There really is. I've written about it in the previous n articles, and it isHarry Brown's permanent investment strategy
This strategy, to put it simply, is"25% equity + 25% long-term debt + 25%**25% short-term debt".
The principle is also very simple, these four types of assets can play their own role in each cycle.
For example:NASDAQ 100+**Long-term debt**+short-term debt**, with 25% each, you can run out of such a ** curve:
The red line is the return of the strategy, while the blue line is the total return of the CSI 300.
In contrast, the return of the red line is not only much higher than that of the CSI 300, but also directly explodes in terms of risk control.
The specific performance of the strategy is as follows:
Ten years since its establishment, the total rate of return, relative to the CSI 300's excess return is, 23 years so far return for
Annualized return on the portfolio, the historical maximum drawdown rate is, the CSI 300 is annualized in the same period, the historical maximum drawdown rate
It's not only more profitable than 300, but also much less risky than it.
Of course, the excellent performance of the portfolio is inseparable from the courage of the Nasdaq, but even if the equity part is replaced by the S&P 500 or even the CSI 300, the experience is still complete and the index is directly bought.
For example, if you switch the Nasdaq 100 to the CSI 300, even if the CSI 300**12 this year3%, but the strategy returns for the year are still the same
The problem is, since its core income is based on the NasdaqThe annualized return of the Nasdaq 100 in the past decade is as high as 17%.
Isn't it all over the NASDAQ?
In fact, the biggest highlight of this strategy is not the gains.
The highlight of the core is its drawdown control, with a maximum drawdown of just 9 in the last decade8%, which is as strong as the NASDAQ, and the maximum drawdown is also as high as 36%.
Moreover, it only takes 14 months at most for the strategy to reach a record high, and the risk is not comparable to pure equity.
Direct stud NASDAQ, not to mention novice investors panic, even veteran investors, in the face of the current high valuation, you are also very jealous.
So this strategy has its raison d'être because it hardly requires timing.
Then the question is, how to select the target and how to construct this strategy?
To be honest, ** assets, recommend the US stock NASDAQ 100 or S&P 500, you can also add A shares, anyway, here is the question of base selection strategy, depending on the opinion.
In terms of long-term bonds, it can be based on excellent domestic bonds or paired with US dollar bonds.
*Simple, just go directly to the ETF.
Short-term debt currency is simpler, you can directly choose Yu Bao, and if you want to have a high return, you can go to short-term debt**.
So is there a version of copying homework, I'll list one for your reference:
Intra-venue version:Benefits Pack:NASDAQ 100 ETF (513100) (25%);
Merchandise Pack:**etf（518800）（25%）；
Long-term debt package:CSI Short Financing ETF (511360) (25%);
Short-term debt package:China Merchants Double Bond LOF (161716) (25%);
Off-site version:Benefits Pack:Nasdaq-100 ETF Connect A(016532) (25%);
Merchandise Pack:**ETF Connect A(002610) (25%);
Long-term debt package:China Merchants Industrial Bond A (217022) (25%);
Short-term debt package:Harvest Ultra-Short Debt A (012773) (25%);
The above set of strategies, the target is relatively simple, and it can also be more refined.
For example, if you don't want to miss the extreme undervaluation of large A shares, then we can replace the NASDAQ with the form of US stocks + A shares.
For example, if the dividend quality of the A-share selection of the strongest strategy index is included, it becomes:
On-site benefit package plus:
Nasdaq-100 ETF (513100) (33%)+
S&P 500 ETF (513500) (33%)+
CSI Dividend Quality ETF (159758) (33%)
OTC Benefits Package Plus:
Nasdaq-100 ETF Connect (016532) (33%)+
S&P 500 ETF Connect (050025) (33%)+
CSI Dividend Quality ETF Connect (016440) (33%)
You can even add Nikkei 225 (513000), German DAX (513030), Vietnamese (008763) and other varieties according to your preference.
The A-share market is not limited to the quality of dividends, such as consumption dividends, growth, or the selection of investment advisors as a substitute for the A** market, etc
Let's talk about bonds.
Due to the high interest rate on US Treasury bonds right now,Long-term debt**It is also possible to add a dollar bond into the portfolio, and the subsequent interest rate cut is very comfortable.
Add the dollar debt, and it becomes:
Floor long-term bond package plus:
China Merchants Double Debt LOF (161716) (50%)+
HFT USD earnings (501300) (50%)
Over-the-counter long-term debt package plus:
Investment Industry A(217022) (50%)+
J.P. Morgan International Bonds (968052) (50%)
Finally, there is short-term debt.
Many people wonder why they need to distinguish between short-term and long-term debt.
Because short-term bonds have a short maturity time, they are similar to cash assets.
It will not be affected by the maturity and interest rate too much, but the volatility of long-term bonds can be much greater.
So short-term debt is the last fig leaf for this permanent investment strategy.
Now the interest rate of US dollar short-term bonds is more than 5%, so it is quite fragrant to have a short-term US dollar bond base
OTC Short-Term Debt Package Plus:
Harvest Ultra-Short Bond A(012773) (50%)+
JPMorgan Overseas Stable (017970) (50%)
In short, the above are just examples, you can DIY yourself.
Each sub-category** can be expanded into 2, 3, and 4.
The core point of today's talk is that the value is very high, and it is much more reliable than most online paid courses.
Especially now that the non-standard is basically completely cool, what fixed income trusts and directional bonds to buy, the risk is not small, and the principal disappears in minutes.
The future is the era of standardized asset allocation, and using ** to do family asset allocation is a part of the system that must be learned....
But the more detailed work, such as how to choose the best ** in the combination, is the next step, limited by space, so I won't expand on it.
If you need it, you may wish to like it, and I will write an extended analysis of this piece in the future.