Originally written by Jiang Xin Economic Observer.
In 2024, China's economy is expected to continue its steady and positive trend as counter-cyclical and cross-cyclical adjustment policies continue to exert force. With the continuous adjustment of the real estate industry and the continuous downward movement of the interest rate center, the A** field, which has experienced a big wave in 2023, may return to the perspective of allocation.
Author: Jiang Xin.
Cover picture: Picture Worm Creativity.
Guide. One ||Judging from the performance of major asset classes in 2023, risk events such as the U.S. banking crisis are frequent, U.S. bonds** are aggravated, and new AI (artificial intelligence) technologies have caused a significant increase in U.S. technology stocks. In addition to **, most commodities are in a ** trend.
II ||Sixty percent of respondents believe that economic growth will slow down in 2024, and among the options that will affect the biggest factors affecting global economic development, the direction of macro policy in the United States and geopolitical changes are the two most popular options.
III ||In a survey of investment managers of more than 100 financial institutions, bonds, US dollar assets, cash assets, and ** are considered to be the most worthwhile varieties to invest in 2024. Among them, ** has the highest support rate.
The most proud investment in 2023 turned out to be a fixed deposit made at the beginning of the year in exchange for US dollars; The most regrettable thing is that when I went to Japan with the leader for an inspection, my colleagues bought Nikkei ETFs and didn't do it myself. If there is anything else to be comforted about, there will be no increase in positions in 2023** can be counted as one. Ma Nan, an individual investor who likes to share his life, wrote this investment summary for 2023 on social **.
Although he pays attention to the ** trend every day, Ma Nan has not opened his ** account for a while. Since January 2024, the Shanghai Composite Index has fallen below 2,700 points, and Ma Nan's mind has begun to "live" again - the valuation of many companies is already very low, which can be properly paid attention to. However, the ** of the "one-day trip" of the "China Special Valuation" concept stock has dizzy it again.
When receiving a questionnaire from 100 institutional investors sent by the Economic Observer, Mr. Li, who works for a large insurance asset management company, made a difficulty: 2023 will be difficult, but 2024 seems to be even more difficult to judge. Although A-shares have repeatedly broken through their "bottom line", looking back at the last cycle, it seems that this moment is even more memorable.
Looking back at the beginning of 2023, hundreds of investors in the market are full of expectations for 2023 in our questionnaire, but the reality is beyond the expectations of most people.
The environment in 2024 remains complex, with both markets and individual investors looking for some definitive answers. However, the extremely tragic performance of the ** market in the first month of the year frightened everyone in the market. Once again, we have found 100 investors who have been in the market for many years, and their understanding of the market may provide some valuable references.
What kind of 2024 will we face?
The Economic Observer issued a macro questionnaire to 25 chief economists of well-known financial institutions and well-known companies at home and abroad on the macroeconomic situation in 2024, and investigated investment strategies with more than 100 investment managers of public offerings, private placements, securities firms, and insurance asset management, in an attempt to depict the development context and investment rhythm in 2024.
In 2024, China's economy is expected to continue its steady and positive trend as counter-cyclical and cross-cyclical adjustment policies continue to exert force. With the continuous adjustment of the real estate industry and the continuous downward movement of the interest rate center, the A** field, which has experienced a big wave in 2023, may return to the perspective of allocation.
2023 with twists and turns
Ma Nan's favorite joke with his friends is, "Has the account (investment) been cut in half?" "Although not many people answered in the affirmative, few people lost less than 30% of their investments.
It seems that the volatility of 2023** has become the most eye-catching existence in the financial market, but behind it, some changes in influencing factors are worth paying attention to.
In terms of macroeconomics, CICC Fortune reviewed 2023 in the research report: The global economy has experienced many risk events: continuous overseas military conflicts, and the expansion of the number of regions and countries involved; the continuation of the pattern of strategic competition between major powers and the escalation of "technological warfare"; The Federal Reserve adopted the tightest monetary policy in four decades, during which financial institutions such as Silicon Valley Bank fell into bankruptcy ......If an investor succeeds at the beginning of the year** and this year will see the above events, it is likely that 2023 will be defined as a "year of crisis". But the reality is that the global economy and markets have shown "resilience": growth in major economies has continued, despite constant risks and crises.
Compared with the unexpected economic recovery of the United States, China's economy will move forward in twists and turns in 2023. At the beginning of the year, the economy recovered quickly after the epidemic prevention and control was stable, and the momentum of economic recovery slowed down after entering the second quarter, and the steady growth policy has helped the economy improve since the third quarter. However, it should not be ignored that the performance of macroeconomic data is not unrelated to the low base of economic growth after the epidemic.
According to the CITIC ** research report, the current GDP (gross domestic product) growth center of China is still lower than the trend change level before the epidemic, and there is still a large gap between the actual output and the potential level, which means that there is still a lot of room for improvement in the endogenous repair momentum of the economy.
Judging from the performance of major asset classes in 2023, risk events such as the U.S. banking crisis are frequent, U.S. bonds** are aggravated, and new AI (artificial intelligence) technologies have caused a significant increase in U.S. technology stocks. In addition to **, most commodities are in a ** trend.
Specifically, U.S. stocks and Japan** led the world, while A-shares and Hong Kong stocks performed weakly, all of which had different ranges**, especially Japan** showed a bull market state across the board; In terms of the bond market, the overseas bond market will be bearish in 2023, but it will usher in an inflection point in the fourth quarter, of which US bonds will continue to rise in the third quarter; In terms of commodities, on the whole, copper, especially those with both investment and hedging functions, has been recognized by more investors.
As the real estate industry enters a deep adjustment cycle, the sales volume of commercial housing has shrunk, and the housing prices in cities at all levels have different degrees**, data from CICC Wealth shows that the real estate value in 2023 will be about 4% compared with 2022**, and the decline will further deepen. In addition, residents are cautious in their willingness to buy houses, so in the allocation of individual family assets, the proportion of real estate assets has a significant downward trend.
On the other hand, as "uncertainty" and "confidence restoration" have become the key words in economic life, investors' investment needs have shifted from creating more wealth to preserving wealth and passing it on to future generations. The investment behavior has shifted from non-stop offense to good defense; Therefore, in terms of asset allocation, it is becoming more and more stable, and even most of the assets are invested in cash and fixed income products. In this context, the balance of residents' deposits continues to hit new highs, and on the other hand, insurance products with both protection and investment functions will also be popular in 2023, and once with the reduction of interest rates, there will be a large-scale centralized insurance situation.
Crisis and opportunity in 2024.
Although the overall valuation of A-shares has been found to be reasonable, Mr. Li's insurance company is still cautious. Talking about the performance of the market in the past month, Mr. Li is very glad that the company has maintained a low state at the beginning of the year.
In the past January 2024, the market*** Shanghai Composite Index fell below 2,800 points. As of January 31, the Shanghai Composite Index was 627%, the Shenzhen Stock Exchange Component Index, ChiNext Index, Science and Technology Innovation 50 Index and Beijing Stock Exchange 50 Index were respectively ** in January. 62% and 2252%。
On the other hand, there are also some investors who are actively "**Wind Information data shows that as of February 1, including cross-border ETFs (exchange-traded open-ended index**), the total size of 840**ETFs in the whole market exceeded 1.7 trillion yuan.
This also means that 2024 may still be complicated. How to clarify the macroeconomic development in 2024?
Recently, the IMF (International Monetary Organization) released a report that predicts that the global economy will grow by 31% and is expected to remain at 3 in 20241%, and a slight increase to 32%。Compared to the October 2023 World Economic Outlook report, the 2024** upward revision is about 02 percentage points, mainly for China, the United States, and large emerging market and developing economies. Still, the outlook for global economic growth in 2024 and 2025 remains below 3A historical average of 8%, reflecting the withdrawal of restrictive monetary policy and fiscal support, as well as lower potential productivity growth.
In a survey of 25 chief economists sent by the Economic Observer, six out of ten respondents believe that economic growth will slow down in 2024, and among the options that affect the biggest factors affecting global economic development, the direction of US macro policy and geopolitical changes are the two most chosen options.
When talking about the development of China's economy in 2024, economists are generally optimistic, with more than 60% of them believing that although the economic growth rate is falling, the quality is improving. More people believe that China's economy is expected to show a trend of low and then high, and most economists** GDP growth in 2024 is 45% to 5%. In the exploration of high-quality development and transformation, the reform of the fiscal and taxation system, the scientific and technological system and the local financing system are the most anticipated parts.
According to the IMF, U.S. economic growth is expected to grow from 2.2 percent in 2023 due to a slowdown in aggregate demand due to the lagged effects of monetary policy tightening, gradual fiscal tightening, and a weak labor market5% to 21% and 1. in 20257%。At present, most institutions in the market (Goldman Sachs, JPMorgan Chase, etc.) expect a soft landing for the U.S. economy in 2024, but at the same time, Citibank, UBS and other institutions expect the U.S. economy to enter a shallow recession. In terms of monetary policy, the market believes that the current round of interest rate hike cycle has ended and will enter the stage of interest rate cuts in 2024, but there are large differences among various institutions on the timing and magnitude of interest rate cuts.
According to The Economist, there will be a total of 4176 countries with a population of 700 million**. In 2024, the year of the world's best, great power games and geopolitical risks may escalate.
Shenwan Hongyuan's research report shows that reviewing the asset trend of the United States in history, the US dollar is weak as a whole and strong. Later, with the fermentation of new reform expectations, U.S. bond interest rates tend to rise, and the global resonance is facing risks.
In the World Economic Outlook report, the IMF said that the risks to the global outlook are broadly balanced as the likelihood of a hard landing wanes as adverse shocks ease. While other underlying factors push the risk profile in the opposite direction, there is room for further upside in global growth.
One reason is that China's economy is expected to recover faster, and for now, more property-related reforms (including faster restructuring of bankrupt property developers while protecting the interests of homebuyers) or larger-than-expected fiscal support could boost consumer confidence, boost private demand, and have a positive cross-border growth spillover.
CITIC ** said in the research report that China is currently in the resonance stage of inflation, inventory and profitability and other multi-cycle bottoming, the general trend of economic recovery may have been clear, and it is expected that the current round of economic recovery process will not come to an abrupt end, and under the effect of the base effect, the second quarter may be the high point of the annual economy.
Equity investments still have allocation value.
In a complex environment, investors are thinking more about how to allocate their assets to preserve value and grow.
In a survey of investment managers of more than 100 financial institutions, bonds, US dollar assets, cash assets, and ** are considered to be the most worthwhile varieties to invest in 2024. Among them, ** has the highest support rate.
Although still volatile, many investment managers have mentioned the value of the allocation of the A** field. In fact, both A-shares and Hong Kong stocks have reached historically low valuations, and corporate earnings expectations have stabilized, with most respondents believing that the net profit of listed companies will increase by 5% to 10% in 2024.
CICC Wealth believes that the decline in A-share earnings under the influence of the epidemic is an important reason for the market in the past two years, among which the real estate industry is the biggest drag, and the recovery of the consumer sector is far from meeting expectations, and the financial tail risk will be gradually controlled in 2024, and the profits of the real estate industry are expected to turn losses into profits.
U.S. stocks and Japan** are also favored investment targets by many institutions. For example, Shenwan Hongyuan believes that the valuation side may be repaired after the Fed's tightening process ends. In addition, we should pay attention to the opportunities in the traditional industrial sector brought about by the reshoring of manufacturing. Japan** has benefited from investment opportunities brought about by the global shift in semiconductor new energy capacity, but the shift in monetary policy may adversely affect valuations.
In their judgment on the bond market, nearly half of the respondents believe that the bond market will remain stable in 2024. In fact, as China's economy shifts from high-speed growth, China's interest rate center is also slowly moving downward, and at the same time, affected by the loose monetary policy in the past two years, the domestic risk-free interest rate has been declining, and is currently at a low level for more than 20 years.
Shenwan Hongyuan Research Report believes that in terms of U.S. bonds, short-term excess U.S. savings and excess finance will still support economic resilience, repeated inflation, bond supply pressure problems have not yet ended, short-end U.S. bond interest rates will remain high, and there are certain upside risks. In the medium term, as the margin of fiscal stimulus declines and the credit cycle declines further in a high-interest rate environment, especially after the signal of stopping interest rate hikes or the Fed stopping balance sheet reduction is clear, US Treasury interest rates will fall significantly.
Under the demand for safe haven, ** still has investment value. Similarly, insurance with risk protection function will also highlight its advantages in the competition with bank deposits and bank wealth management products, and also have good allocation value from the perspective of long-term income of funds.
In Ma Nan's personal outlook for 2024, security has replaced income as the primary principle for allocating his wealth, but while allocating the bottom position, he will still find an opportunity to fight.
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Original title: "100 Investment Bigwigs Consult Dragon Year Investment".