Category: Money tips Release Date: 2006-10-06
The current A-share market is still a developing market, still with a certain speculative atmosphere, so to predict market timing is very difficult, and it is quite dangerous, and also increased the investment risk. In this regard, my view is that investors should be diversified investment, and through the company's investment rather than investment in the market to carry out. Attention to those good quality companies, believe that the future of these companies get through earnings, this is the crux of the problem should pay attention to, rather than to predict the future of higher short-term market lower. Through such analysis, research and investment methods, will reduce the investment risk, and can increase the long-term return on investment.
We only focus on fundamentals, rather than technical. As of September 30, 2005 Franklin Templeton Fund Group's assets under management more than 450 billion U.S. dollars, nearly 250 funds, but there is no staff dedicated to technical analysis. We believe that our purchase of the company rather than market trends, so we are more concerned about the company itself, hoping the value of the company itself can be improved, and therefore, we do not focus on technical analysis. "Re-select unit, light timing," is our style of investment research.
Frequently asked about the recent market forecast for this year as a whole, this is a very difficult question to answer. We believe that as an investment period of one year too short to judge the market there are too many uncertain factors affect the market trend. Based on individual 13 years of investment experience, my view is that can accurately grasp the next 10 years, long-term market trend, as A share price depends primarily on three factors: the dividend rates, earnings growth and price-earnings ratio. Long as we know these three figures, we can know that a stock market in 10 years to grow to what height. For example, if A-share market, the average dividend rate of 2%, the mainland stock market over the next 10 years, GDP growth has remained at 7% to 9%, while the annual growth rate of stock market returns should be 10% to 12% between, if the market's price-earnings ratio has been maintained at current levels, the market should be an annual 10% to 15% of the rate of growth can be seen, A-share market will be 10 years later rose to a very high level. China's sustained economic growth and the introduction of sound national policies, will maintain this market growth rate. The medium and long term, taking into account the rapid development of China's economic stability and the governance structure of listed companies to gradually optimized, and we remain optimistic about the market. High-speed economic development, will increase the demand for goods and services, which will increase the profits of listed companies.
The choice of investment portfolios, I suggest that investors must carefully research the company's fundamentals, not only to know whether it worth investing in these companies, but also to understand whether these companies cheaper. Only good and cheap company, is an ideal investment target, because the investment that they can give investors long-term stable return on investment. (The author is Guohai Franklin Fund Management Ltd fund manager)
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