There are 3 reasons why losing money isn't exactly because you're not trying hard enough. First of all, the reported performance of U.S. stocks can give the illusion. While U.S. equities have outperformed recently, we can't just look at the symptoms. In fact, in the long-term trend, A-shares also have their own advantages. **The Times article noted that the Shanghai Composite Index is growing at a compound annual growth rate of more than twice that of U.S. stocks. This means that despite the volatility of A-shares, they are generally profitable.
Chen's article compares the Shanghai Composite Index with the three major U.S. indices from a new perspective. He stressed the importance of CAGR as a comparative indicator. This indicator reflects the compound annual growth rate and is an important tool for measuring return on investment. By comparing the CAGR of the Shanghai Composite Index with the CAGR of the three major US indices, we can conclude that A-shares are no worse than U.S. stocks. In fact, the average annual increase of the Shanghai Composite Index is not only twice that of the Dow Jones, but also exceeds the rise of the Nasdaq (a hub of high-tech companies). This data truly reflects the investment potential of A-shares and gives investors confidence.
In this age of information overflow, we often get tired. News and social media are full of stories about making money in U.S. stocks, and these stories are often heartwarming. But we should look at these reports objectively and not be fooled by superficial appearances. Investing is a long-term process, and short-term ups and downs do not really reflect the value of a market. A-shares have their own advantages and characteristics that cannot be ignored.
A-shares and U.S. stocks have different development backgrounds, which is one of the reasons for the difference in performance between the two. Chen Jiahe mentioned in the article that China has always been in an era of rapid macroeconomic development. Economic development is an important factor in the trend, and the two are closely related. In 1990, China's GDP was only 189 trillion yuan, and by 2023, it is expected to reach about 127 trillion yuan, an increase of nearly 6,619%. In comparison, the Shanghai Composite Index grew at a compound annual growth rate of 136%, higher than the GDP growth rate of 28 percentage points. This means that the gains in A-shares are in line with China's economic development.
U.S. stocks have experienced many ups and downs and shocks, including two world wars and multiple economic crises. These uncertainties have had an impact on U.S. stocks. Taking the NASDAQ index as an example, Chen Jiahe pointed out that its compound annual growth rate is 99%, which is lower than the Shanghai Composite Index. This data once again shows that A-shares are not worse than U.S. stocks, but are affected by the background of economic development.
When discussing the issue of A-share losses, we cannot ignore the impact of investor behavior and market environment. In China, these reasons have also led to poor profitability for A-share investors. While the market has its own advantages, many individual investors do not benefit from it. The article mentions that even though the Shanghai Composite Index has risen 28 times in the past 33 years, most investors have not benefited from it, but many have fallen into a trap situation. This can be due to factors such as poor investment timing, mismanagement of funds, or market manipulation.
Finally, as individual investors, we need to be clear about our investment objectives and risk tolerance, and carefully choose our investment methods according to our own circumstances. Whether it is A-shares or U.S. stocks, there are investment risks and uncertainties. The key is to improve one's investment ability through continuous learning and accumulation of experience to better adapt to market changes. At the same time, it is also important to pay attention to the timing and amount of investment, and adjust flexibly according to market conditions.
In short, A-shares have their own advantages and disadvantages compared to U.S. stocks. Investors should choose the investment method that suits them on the basis of rational analysis and in-depth research, and do not blindly chase market hotspots, but make decisions based on their own investment goals and risk tolerance.