Counting from 2009, the U.S. bull market has lasted for 13 years, and the cumulative gains of the Dow, Nasdaq and S&P 500 far exceed those of other countries.
After the outbreak of the new crown epidemic, under a series of economic stimulus plans, funds poured into the stock market, and the index’s highest point kept setting new records.According to Bank of America’s inference, if the second half of this yearCash flowThe entry speed remains the same,Global in 2021Stock fundThe number of capital inflows will exceed the sum of the past 20 years.
Index comparison: each has its own merits
What makes US stocks lead the world? From the perspective of the Dow, it has only 30 constituent stocks, covering the most advanced industries in the United States, and these companies represent the development direction of the United States and the global economy.itsFintechThe stocks of other new economy components are rising steadily, the trend is stable, and the amplitude is small.Global stock marketwind vane. There are two main reasons for the sustained rise.From an internal point of view: the quality of the constituent stocks is excellent, and strong stock prices continue to push up the index; from the external point of view: the United States is flooding, and funds are flooding the stock market.
With the increase in the number of US stocks, the Dow has been criticized by many investors.First of all, the Dow takes stock price weighting, and its rise and fall cannot fully represent the trend of the entire US stock market; secondly, it is common for the index to rise and individual stocks do not rise. An analysis of US stocks that have been listed for more than 13 years found that less than half of the Dow individual stocks have outperformed. Outperformed the Nasdaq stocks by only 20%; again, the weight or imbalance, such asUnited HealthThe group weight is nearly 9%,appleThe group weight is only 3.07%,appleThe group market value isUnited HealthMore than 6 times the group; in the end, the Dow may deviate from the trend of the S&P 500 (market capitalization weighted).
In contrast to A shares,CSI 300The index is weighted by market capitalization. This weighting method is considered more scientific.In addition, the weight of the CSI 300 new economy industry surpassed the Dow, but the CSI 300 underperformed the Dow by a large margin, mainly because the price fluctuations of the constituent stocks made the annualized return rate poor. Since 2009, the annualized volatility of the CSI 300 is 1.34 times that of the Dow. However, A-shares also have outstanding performance. The China Securities Liquor Index has risen nearly 17 times since 2009, which is more than twice that of the Nasdaq. Therefore, it is impossible to determine which weighting method is better.
U.S. stocks are unrealistically high: A-share investment resilience highlights
While the stock index is rising sharply, the inflation rate in the US has frequently exploded. Many investors believe that the US stock market, like the Indian stock market, has an “inflated” situation. The illusion of stock market prosperity is a serious departure from the real economy that has not recovered after the new crown epidemic.oncecurrencyWith policy tightening, bubbles will come at any time, and the index decline may trigger a butterfly effect (panic selling).
But for A shares, investment resilience is prominent. After the COVID-19 pandemic, A-shares have become a global asset safe haven and are favored by domestic and overseas capital. Coupled with the low valuation of the A-share index, this has prompted the transfer of wealth to the A-share market. The core assets received a substantial increase in foreign capital,Although the performance of A shares is relatively flat at this stage, with the influx of a large amount of foreign capital, A shares are expected to stand at the forefront of growth in the future.
(Article source: data treasure)
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