Find over 100 first-year investment strategy zt pondering a question: Suppose you go back 100 years ago (ie 1900), with 10,000 pounds, and you can always live to 2000, can be in any country, any market investment, you what will be your investment strategy?
might give you some small hints. In the turbulent 20th century, the 1900 can be described as bland. Queen Victoria ruled the world's largest empire, the agricultural population of the United States, 42% of the total population. Immersed in the heart of Europe, and Hope, Japan, Germany best players together, such as the rising day. That year, Himmler, Khomeini was born, Nietzsche is dead. That year, the U.S. GNP was 18.7 billion U.S. dollars, population 7609 million, of which 726 million people in New York, Nevada, only 42,335 people. That year, China is following the coup of the winter Reform Movement, attempts to waste dynasty Empress Dowager Cixi up Scientific and technological achievements of the year event is a bit of a fool the advent of the camera and the Paris World Exposition. Obviously, any of a hundred years stood a genius, can not predict things 100 years of vicissitudes. Today we are in the beginning of 2007,
prada leather, the same can not predict the next 100 years. So, is there an investment strategy, you can not predict the future situation, it is still standing?
When facing a problem, the Chinese people's wisdom is to see history. Over the past one hundred years from the point of view, the existence of a simple and effective strategy, it does not require complicated skills, only rational,
christian louboutin pumps on sale, humility and perseverance. Next, I quote a lot of data from previous years, the Netherlands and the World Bank out of the London Business School, a pamphlet entitled Marsh, they control their own living doing is called These professors can be described as extremely virtuous, as I have always wanted to write this article, provides some valuable historical data.
Do not lend money to the government and the number one investment bank
enemy is inflation, the government used its guns, backed by the sword, ink on paper with cheap money, the people pocket real money, real physical goods hijacked. If you put money buried in the backyard under a tree, it is certainly one of the biggest loser in the 20th century, because there can not fight inflation. Counting simple account, if you have 1 million, if the inflation rate is 5%, 20 years later, the purchasing power of only 35.84 yuan; If the inflation rate is 10%, then too bad, 20 years later, 1 million of your hard-earned money, purchasing power was only 12.16 yuan.
if the money in the bank interest receivable, which is equivalent to lend money to banks, buried in the backyard under a tree than a little bit strong, but interest rates are often lower interest rates than long-term government bonds, then, may wish to skip directly about investment bonds (borrowing money to the government) in the 20th century rate of return.
be pretty good fortunes in the 20th century, the British example. ABN AMRO / London Business School (ABN AMRO / LBS) long-term bond index that the basic long-term bonds on behalf of the United Kingdom. If you are in the beginning of 1900 to 10,000 pounds to invest in this index, the year 2000, it will become 1.88 million pounds, annual conversion, that is, the average annual growth rate of 5.4%. Sounds good, right? However, if taking into account inflation, to not so much matter. 100 years of the 20th century, the UK retail price is the average annual growth rate of 4.1%, with the price increase to reduce debt proceeds to rather disappointing people. This 100 years of British long-term government bonds yield an average annual rate of just 1.3% annual gain.
earn too little long-term bonds, short-term bonds do not even talk about it. If you get £ 10,000 in 1900 investment in short-term treasury bonds to buy British, 100 years later would become 1.4 million pounds, equivalent to 5.1% annual growth rate of minus 4.1% inflation rate, only 1% annual rate of return. 20th Century British national debt investors, they seem today, are regarded as the 20th century, the brutal competition among national winners: the United States, Britain, Japan, Italy, Australia, Canada, Denmark, France, Italy, Netherlands, Sweden and Switzerland. If you invest in this long-term bonds in 12 countries,
jimmy choo bridal, annualized yield of the top three are all small European countries: Denmark 2.7%, Sweden 2.3%, Switzerland 2.1%. Sometimes a small country people are lucky, the 20th century, the country did not experience the turmoil the big catastrophe, not to dominate the world generations of aggressively ambition, also escaped to Germany, Japan sent money mad people exploit the disaster caused.
the 12 countries, the worst long-term bond yields, is ambitious three countries: Germany, -2.3%; Italy -2.3%; Japan -1.5%, all negative. Even more frightening is that the German statistics also exclude 1922 and 1923 was disastrous for two years. Early 1923, 2 million German marks can be exchanged for $ 1; 10 months, you need to exchange with 630 billion marks to 1 U.S. dollar. This inflation have all of the domestic debt written off, cash, bank deposits, debt, bonds are worthless, causing long-term bond investors almost 100% of the loss. The three countries have one thing in common, both in the 20th century's dignity in the many ingenious, but unfortunately, dignity in the kingdom come forth in large, people are often unhappy.
However, having said that White did not pay tuition fees. First half of the 20th century because the loss is too large to eat after World War II, and treat them a scourge of inflation in Europe, has yet to relax their vigilance. Particularly in Germany, the first half of the 20th century it was the most vicious of inflation, the result is that the second half was the lowest among 12 countries. Extremes meet again played a role in the theory, half of the 20th century, the highest long-term bond yields in several countries, Germany and Japan account for the top few.
our history lesson from the 20th century, the first words learned: Do not lend money to the Government, particularly the ambitious dignity in forth in large numbers do not lend money to the government, of course, not to lend at lower interest bank. However, if the patriotism or even donated to the government to borrow money, not I'm talking about range. Since it is the patriotic, not for profit, is not an investment, they will receive spiritual harvest. Enjoy the stock
compound
God made a long-term inflation the bad guys, but also left a way out of this stock investment. 20th century, mankind experienced two world wars, trying to test a variety of social systems, resulting in hundreds of millions of unnatural deaths of the population to experience the dazzling prosperity and horrible depression. In these 100 years, through the best and the worst of times, the storm has passed, we found that the most refuge. Suppose you are in the beginning of 1900, the £ 10,000 total investment in the UK stock (still to ABN AMRO / London Business School, the subject index), after 100 years it will become 1.6946 billion pounds. Again, where the stock is
to remind that in just about stock investment, you must get every bonus money, re-investment back to the stocks. Take dividends reinvested, the success of this strategy is the secret. If you are the same in early 1900, taking £ 10,000 investment in the UK stock market, but you are consumed each time bonus, to improve life, then, 100 years later, it grew only 161 million pounds, less than 1.6946 billion pounds 1%, it is different. You put money into listed companies, the expense of your current consumption, point it to create more value for society, God will reward your self and altruism.
Buffett once said that only two of his investment principles, marksman stock, but rather that, as long as keep the principal, to enjoy compound interest, compound interest even if it is slow, will be the ultimate winner.
even from 10,000 to 1.6946 million in the phenomenal growth, only 10.2% of the annual rate of return. 20th century English name of the overall return on equity is 10.2%; the UK long-term bonds, short-term debt were 5.4% and 5.1% of the nominal rate of return. The survey of 12 countries ranked in stock returns, the top four in Sweden 8.2%, Australia 7.6%, U.S. 6.9%, Canada 6.4%. Bring up the rear of the four countries, although the ups and downs in the 20th century was battered, but the stock returns are still more than other tools, Germany 4.4%, Japan 4.2%, France 4%, Italy 2.7%. These figures seem very common, but they become the usual, is 100 years long-term compounding.
then ruler of the European Monetary Rothschild once said, cents did not, however, see my article readers, in general, if the annual rate of return is 10%, you 25 years later (age 50) will have 1.87 million, 35 years later (age 60) will have 4.92 million yuan; if the annual rate of return is 20%, 50-year-old will have 8.78 million yuan, 60-year-old will have 54.82 million yuan. You do not need to worry about retirement and inadequate pension.
However, you may ask, inflation? In the event of hyperinflation, would not the 10%, 20% yield becomes insignificant? Do not be afraid, even if this happens, the stock is still the only safe haven. For example, the German hyperinflation of 1923, but the German stock market also rose by 300 billion times. God bless those who hold shares in the disaster the people.
real estate it? Real estate is more secure than the stock it? Wrong, much less real estate than the stock In Chinese people's minds, it seems not always to buy a house buy property loss, but we experience the real estate market is really too short, and that the two decades, both to catch up with the special domestic real estate bull market, but also just run into global real estate bull market, short-term (one or two decades is still a short-term) data, if used as a sample drawn so-called law, it will kill people. U.S. real estate, once in 100 years time, marking time, and during that time the U.S. economy is also rapidly developing. Step back, even if the bull market in real estate, real estate company growth stocks, you can still share the real estate boom.
this point seems to have missed one: gold. In fact, not worth mentioning, something far less than stocks, because it is something collection of selfish people. Hide your wealth into gold, quit the company and create incremental wealth, do not take the risk, how can you expect the incremental share of social wealth of it. 1980, $ 850 can buy 1 ounce of gold, when the Dow Jones index can be an exchange (at the time the Dow less than 900 points). Over the past 26 years, and today more than 12,000 points, gold, or 600 U.S. dollars / ounce, gold has depreciated relative to the Dow 20 times. The most
forget time, forget to stock selection, buried
hold index funds invest in stocks know only the first step, how to invest to become a winner in 100 years, is another problem. The answer, than most people imagine is much simpler. Healthy people of any mind, as long as a third grade education, three minutes after the communication, you can master this investment strategy.
often mistakenly believe that most people, equity is nothing more than two strategies, one is wise to choose the timing, the other is the smart choice of stocks. In fact, these two are astray, can not ensure that 100 years after you become a winner. Precisely the time you forget, forget the stock selection, buried holding index funds (funds tracking the index), and then simply ignore how the market volatility and ignore the industry, how the company changes. Perhaps you have a lot less,
very sorry, currently available in the market almost all the investment books are teaching you how to choose the timing, how to select stocks. To practice real power, you have to first destroy the original martial arts, the internal force to disperse these scary heretics, you should sell these books, paper recycling, are also considered as a point on the circular economy of small contributions.
delusion that the law of equity volatility to determine the trading opportunity, it is not possible. Think they can predict the ups and downs, and if to give him 100 years to do this kind of experiment, the only outcome is failure. In the chaos of the market, even if it is extremely talented, they seek certainty Change the law efforts to the defeat in the end. Timing of this effort, Mark Twain in April, November, May, March, June, December, August and February. Crazy. If you rely on this investment, you need at least ten times the successful sale and purchase (in the ten life only for sale, for many domestic investors have been rare), ten times the accuracy of the timing of transactions, has been parts per billion one or less. In this posting I notice that if you really find someone able to predict stock prices up or down, please tell me right away, I'm with my lady out to see God.
posting I must have ignored, the time management gurus how can such a But now they have a lot of people sincerely believe that, although stock prices unpredictable ups and downs, but the cycle of rise and fall of industries and companies, always grasp. In fact, this may not be.
1900, Britain's top 100 shares in the railway industry is the absolute boss, accounting for 49% of the market value. 100 years later, the railway industry only accounts for 0.34% of the share of stock; the textile industry accounted for 5% of the time, centuries later to 0%; was telegraph and telephone industry accounted for only 2.5%, 18.4% hundred years later. In 2000, 100 shares, the market value of 12.3% of the oil and gas industry in 1900 accounted for only 0.2% of the poor. 2000, accounting for 11% of the market value of the pharmaceutical industry, accounting for 5% of the information technology industry in 1900 is zero. 100 years, the number of changes in the Kingdom, the hero, not to mention industry, the company, even if the price ups and downs than the odds of guessing slightly higher, but still far from enough to sustain a winning trading system, not to mention we are talking about 100 years of investment strategy. Again, in this chaotic world, the pursuit of certainty in the forecast, is still beyond the limits of human intellect. As long as the judge of any number of talented enough, it will certainly return to the mean. Even Warren Buffett, who has repeatedly broken through the He did just five years, give him five years if I believe it is inevitable to the average return. If not Hunzhao mind to stay sober, his long-term performance, I think it will become increasingly close to the index funds.
However, we have to admit, the premise of maintaining the humility, the human intellect is still great. Although there is no perfect answer, but we have a second-best option: index funds. Many people like to be confused with these concepts: the Dow Jones index and the overall U.S. stock market, the Hang Seng Index and Hong Kong's total stock market index and the H shares of state-owned enterprises as a whole, the Nikkei and the Japanese stock market, the Financial Times Index and the UK stock market. Figure out the difference between index and the nature of the market, but also one of the reasons they can not find the right path.
markets in which these indices and their difference lies in the so-called index of the Talk about the In plain words of, the difference lies in the index at the top. We now see these indices to the Hang Seng Index from the Dow Jones, from the Nikkei Financial Times, one of the constituent stocks, shopping are all survivors of the cruel years, those who have been knocked out of the company, already has been removed the index. In other words, the index will always show you the bright side of the market more.
Better management, better economic fortune of companies in the index the greater the weight. Need to be reminded of is that many people blame the current index of stocks of large companies that the weight is too large, resulting in indices for The UK Financial Times Index, for example, in 1900 the largest proportion of 5 companies, up 30%, the largest 10 companies accounted for more than 50% share. In the 20th century, most of the time, the proportion of large companies has been declining, began to rebound until the 90's, but still keep up with the proportion in 1900. Regardless of the weight of large companies decreased or increased,
paul smith shoes, can not change the fact that: a long enough period of time, the For example, earlier had said before, if you are in the beginning of 1900, the £ 10,000 total investment in the UK stock (the ABN AMRO / London Business School, the subject index), after 100 years it will become 1.6946 billion pounds. But if you invest in stocks is not the whole, but the continued investment in the
So, many people complain about Index is not equal to the market in the long run, the index will be stronger than the market as a whole. As the proportion of funds in the market increases, when they themselves become the market, will be defeated by their own. If there are 1,000 funds constitute the main market, only a few of them must be able to go beyond the average fund, understand this does not require much mathematical knowledge. The index fund is different, the index will beat the market in the long run, so most of the
you might ask, why those investment books, a professor of investment, securities analysts, fund managers, financial experts, did not say so? Man, Warren Buffett was not long ago that it? Over 100 years of investment strategy is so simple, so you may not believe in shock. Like the Investment as well.
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