Category: Money tips Release Date: 2007-04-07
November 7, 2005 11:00:19 Central Financial Network
Shanghai and Shenzhen stock market bear so many years and have yet to see a clear turn for the better. Control the U.S. stock market's 200-year history of Wall Street, where several CBBC turn, gave us a lot of inspiration. To some extent, Shanghai and Shenzhen stock markets are being repeated these developments.
From 1926 to 2000, the New York Stock Exchange, American Stock Exchange and Nasdaq Stock Market, with a total market value of stocks below the 192.6 million U.S. dollars, an average annual return of 16.71%, compared with 4.14 billion U.S. dollars market value of more than 6.5% higher than the rate of return on equity. The latter are mostly in the constituent stocks of the S & P 500 Index is a typical large cap stocks. Of course, the small-cap stocks the annual risk of 49.3%, only 19% of large-cap stocks. From this perspective, small-cap stocks of the high rate of return seems to be a compensation for weak liquidity, but for a long-term investors, transaction costs will not be a very important factor. Well-known fund manager Lynch had this to say: buy stocks when they look to sell, like marriage, is on how the divorce is as absurd as you want.
In fact, from 1926 to 1959, the small-cap stocks than large capitalization stocks has never been. Even to the end of 1974, small-cap stocks, the average compound interest rate is also only 0.5% more than large-cap stocks are insufficient to cover the majority of investors, be held responsible for the excess risk and transaction costs. However, in the period 1975 to the end of 1983, small-cap stocks blowout occurred. Small-cap stocks achieved an annual compounded rate of return of 35.3%, is twice as large-cap stocks. 9 years, the small-cap stocks overall return rate of more than 1400%.
Blowout small-cap stocks, there is its historical background. First of all, when the United States are from the most severe economic downturn in the recovery of economic recovery in small-cap stocks performed particularly well. Our economy is the fastest period of growth began to cool, due to structural adjustment and economic growth pattern, large companies are increasingly affected by the macro-control pressure. Secondly, when the OPEC oil price keeps rising, a serious blow to the U.S. many large enterprises, such as iron and steel companies and auto companies, because the production of these companies will be a lot of energy. This is the stage we are in now is very similar. Even after the record high oil prices are still hovering high, all kinds of large-scale enterprise production costs continue to rise. At that time, the U.S. pension managers and institutional managers, long-term holding only large-cap stocks, "a beautiful 50" drop, so that they are more concerned about the small-cap stocks. This situation, with the previous large-cap stocks the fund so that with high liquidity premium and SSE 50 Index's decline was similar to what ah!
Book value and the relatively low price-earnings ratio of stocks, known as value stocks; the contrary, a high ratio of two shares are referred to as growth stocks. From the United States history, from 1963 to 2000 compound annual rate of return on the stock shows value stocks historical rate of return than growth stocks, in which the value of the smallest plate-stock annual return rate of 23.26%. Therefore, after these two years the fund, after a great fuss about the concept of blue-chip, low book value and low price-earnings ratio of small-cap stocks is worth mining. In the small-cap stocks are undervalued market context, the United States in 1975 after the stock history will be repeated in China, this is a great opportunity not to be missed.
