1. Central banks all over the world have adopted a monetary policy of "large water release" and low interest rates.
Since the outbreak of the epidemic, it is estimated that many central banks and governments around the world have launched stimulus plans of about 65,438+05 trillion US dollars to protect the economy from the COVID-19 epidemic. This record scale will make balance sheets and deficits soar to peacetime highs. The central bank will also buy more bonds. Some central banks said that there is no upper limit for buying bonds, which will make the figure of 15 trillion US dollars continue to expand by the end of 2020.
From this picture, we can see that central banks have cut interest rates one after another, and the policy interest rates of almost all developed economies are at or near zero. In countries with higher interest rates before, the greater the interest rate cut, the lower the interest rate, and the smaller the interest rate cut.
On June 16, Federal Reserve Chairman Powell reiterated that he would keep interest rates near zero until the economy returned to the right track, and called the US economic outlook full of "uncertainties".
2. The uncertainty caused by the epidemic has increased significantly.
The first is the uncertainty of the epidemic.
In every previous economic crisis, the economy actually kept running, and it was more a question of operating efficiency. However, the economy under this epidemic has stopped working, so the economic recovery will be difficult to promote because of the development of the epidemic. After all, it is difficult for us to accurately judge when the epidemic will recur. Will it mutate? And how long will it last? It is likely to take a long time and an epidemic, which are uncertain.
The second is the uncertainty of economic recovery, including the time to resume work.
In addition, due to the uncertainty of the external economic environment, people's consumption habits will also change. Will it be retaliatory consumption or retaliatory deposit? These changes in consumption habits are not clear at present. Even the industrial structure of many industries has changed, such as tourism and film industry.
The third is the uncertainty of the situation in various countries.
Globalization has been going on for decades, and the voice of local protectionism echoes around the world from time to time. Will protectionism be further strengthened under this epidemic? Furthermore, where will anti-globalization develop? Which industrial chains will leave China? Which industrial chains cannot be evacuated? What will happen to people's ideology?
Every part of society will have an impact on the external environment of globalization in the past, which makes our economy face great uncertainty.
1. Handling a large amount of water discharge
The essence of large-scale water release is the devaluation of legal tender caused by excessive currency. From the perspective of asset allocation, investment is to invest in assets with higher returns with relatively depreciated assets.
Of course, when doing asset allocation, everyone will have requirements for the rate of return. Perhaps most people used to think that 5% yield was acceptable. But once the interest rate falls, the yield will also fall, which is lower than most people's expectations, so everyone's risk appetite is likely to increase.
In this case, we should invest in some assets whose income growth rate exceeds the currency depreciation rate. The following three directions can be referenced:
The commodity itself can offset the income reduction caused by excessive currency by raising the price. But not all goods can go up in price. Relatively speaking, industries with rigid demand, controllable supply and high industrial concentration, such as grain, food and beverage, are more likely to transmit the inflation effect caused by excessive money through price increases.
Looking back, we can find that during the period from 1970 to 1980, the prices of corn, wheat and other commodities rose sharply.
Judging from this year's A-shares, the price increase of food and beverage, a consumer goods industry, is relatively good, which is actually a cognition of investors. Because they are just in need of consumption, once they encounter inflation, they can pass on the rising costs by raising prices, thus maintaining the stability of gross profit.
In addition, when the economy is bad, the low-end product lines in the industry are likely to be eliminated, and the head company can digest these vacant market shares and obtain higher profits.
Anti-inflation growth refers to some high-growth industries or companies whose income growth rate can outperform inflation. At present, the high-growth industries are mainly medicine and technology.
The rapid growth of the pharmaceutical industry is mainly due to the demographic changes brought about by the increasingly serious aging, which leads to the increasing demand for medical care in society. In the foreseeable future, the medical industry will be in short supply.
Science and technology industry represents the direction of human innovation, and it is also a place to create new demands, such as the upgrading of electronic products. By creating new demand, we can improve the growth rate of the whole industry and outperform the market. For the science and technology industry, its growth is mainly an incremental game brought by new demand, and the new demand created by the industry itself brings high growth.
Gold itself can be regarded as a zero-interest bond. Compared with the possible negative interest rate bonds, their allocation value will definitely be higher, thus absorbing more funds.
In the past, every time the central bank released water, gold was basically the first to lead the gains. Of course, there are many factors that affect the price of gold, which are related to the dollar, interest rate and inflation rate. Once the market is short of water, the price of gold will go down. For example, 198 1, the price of gold fell, mainly because the Fed raised interest rates several times.
Other assets that can absorb funds include large-scale real estate, luxury houses and financial real estate.
2. What to buy when uncertainty increases?
Generally speaking, the convenience of assets is very important.
The first half of 2020 is not over yet, and many things beyond our imagination have happened in the world. In such an external environment, people's expectations for the probability of black swan have increased. In order to cope with this situation, our demand for assets with better physical liquidity will increase, such as gold in previous wars.
The other is assets that guarantee survival, such as food. Some time ago, the popular "Doomsday Package" and "Doomsday Canned Food" on Amazon sold well.
Bitcoin, a digital asset, is actually a substitute. After all, the portability of gold is online, and food is likely to encounter a run. Bitcoin can be stored in an electronic wallet, which is very convenient to carry.
In short, agricultural products with relatively concentrated output and supply, or some commodities, gold, high-growth technology, consumption and pharmaceutical stocks are all assets that can fight inflation.
In the next period of time, the capital market will gradually shift from the stock game to the incremental game.
This is because the central bank releases water, which leads to excess liquidity in the market. These extra money always need to flow to a certain market, and the best thing in this market is financial assets. This is because, if money flows to the daily consumption field and raises prices, the livelihood of many low-income people will be affected, thus affecting social stability, and the government cannot support this behavior.
If the capital flows to the financial market, it will definitely chase the white horse stocks with good fundamentals. Because these targets are scarce, these white horse stocks will continue to rise, forming a Ponzi feature, and there will be a capital relay to keep the prices of these targets rising. The continuous rise in prices will attract more people's attention and form a strong upward trend.
In this case, the investment style on the right may become the dominant market. The pursuit of funds in the market will make the prices of some targets deviate from their values, forming Ponzi characteristics, and then rapidly decline after accelerating the surge. The surviving funds will continue to chase the next Ponzi game.
The Ponzi game of capital is more likely to occur in the environment where the central bank releases water. At present, there are not many Ponzi-like A-shares, because it happened in the second half of 20 19, and a number of them have been born. Secondly, there is great uncertainty in the current economy, which leads to the inability to open the right side of the market. In addition, the Bank of China maintained a relatively good concentration and did not release water without restraint.
In the second half of this year, especially after September, with the development of the epidemic, the economy will be determined a lot. And because the whole market is very poor in the first quarter of 2020, it also means that the year-on-year growth in the first quarter of next year will be much higher.
At that time, if foreign capital continues to release water, these funds are likely to flow into China again, thus pushing up the price of domestic investment targets. So from the time window, September this year is actually a better time window.
Above.
References:
Haitong Chao Jiang: What should I buy if the currency is oversold? -Understand the logic of asset allocation changes.
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