Core Viewpoint - The article discusses the implications of the recent Federal Reserve interest rate cut and the characteristics of the U.S. stock market, emphasizing its long-term investment potential despite short-term fluctuations [3][6][7]. Group 1: Federal Reserve Actions - The Federal Reserve has initiated its first interest rate cut of the year, reducing the federal funds rate by 25 basis points from 4.25%-4.50% to 4.00%-4.25%, aligning with market expectations [3]. - Fed Chair Jerome Powell described this rate cut as a "risk management" move, indicating that the Fed is not entering a prolonged rate-cutting cycle, which the market interpreted as a hawkish stance [6]. Group 2: U.S. Stock Market Characteristics - The U.S. stock market is characterized by high efficiency and low investment difficulty, meaning that information is quickly reflected in stock prices due to the active trading environment [8]. - The market is dominated by institutional investors who possess advanced research capabilities and technology, allowing for rapid information processing and trading [10]. - The diverse participant structure in the U.S. market, including hedge funds, mutual funds, and pension funds, leads to comprehensive information analysis and price discovery [11]. Group 3: Investment Strategies - Ordinary investors face challenges in outperforming indices due to the market's efficiency, making long-term holding of low-cost index funds a more rational strategy [12][13]. - The strong fundamentals of U.S. companies, coupled with significant stock buybacks, have driven the long-term bull market, with the S&P 500's price increase primarily attributed to earnings growth rather than valuation expansion [14][16]. - Major U.S. companies have demonstrated robust profitability and have engaged in substantial stock repurchase programs, enhancing earnings per share and supporting stock price appreciation [18][19]. Group 4: Complementarity with A-shares - The article highlights the low correlation between U.S. and A-share markets, suggesting that holding both can mitigate overall portfolio volatility during market downturns [22][26]. - Historical data indicates that during A-share bear markets, U.S. stocks have either remained stable or declined less, providing a buffer for investors [28]. - A balanced allocation between U.S. and A-shares allows investors to capture opportunities in both markets while managing risk effectively [32][34].

Core Viewpoint - The article emphasizes the recent surge in gold prices, driven by market expectations of interest rate cuts by the Federal Reserve and concerns over its independence, making gold an attractive investment option for risk-averse investors [1][11]. Group 1: Gold Market Dynamics - Gold prices have recently surpassed $3600 per ounce, marking a new historical high after a four-month period of stagnation [1]. - The rise in gold prices is attributed to two main factors: the upcoming Federal Reserve meeting and President Trump's criticism of the Fed, which has raised concerns about its independence [1][11]. Group 2: Investment Performance of Gold - Historical data indicates that gold is a high-quality asset worth allocating to, with a 77% probability of profit over the past 13 years, and an annualized return close to 9% [2]. - The performance of a specific gold ETF, Huawei Gold ETF Link A, shows a total return of +178.74% since inception, outperforming the CSI 300 index, which returned +96.35% [3][6]. Group 3: Gold and A-Share Market Correlation - Gold and the CSI 300 index have only experienced simultaneous declines in two out of the last 13 years, indicating a low correlation of 0.07, which is beneficial for diversification [4][9]. - In years when the A-share market declined, gold prices generally increased, providing a hedge against losses in equities [5][9]. Group 4: Benefits of Diversified Asset Allocation - Diversifying investments between gold and A-shares allows investors to benefit from both asset classes without the need for market timing, reducing anxiety and enhancing long-term returns [7][9]. - The strategy of holding a mix of low-correlation assets like gold and A-shares can help mitigate risks and provide steady returns over time [9][10]. Group 5: Central Bank Influence on Gold Prices - Central banks play a crucial role in determining gold prices through their purchasing behaviors, with ongoing increases in gold reserves observed globally [13][14]. - China's central bank, for instance, has over 2300 tons of gold reserves, which is significantly lower than the global average, suggesting potential for future increases in gold holdings [14][15].

Core Viewpoint - The article emphasizes the importance of diversified investment strategies to balance risk and return, highlighting three main asset classes: stocks, bonds, and commodities [2][3][56]. Group 1: Investment Strategies - The first method of wealth generation is becoming a shareholder by investing in companies expected to grow, such as buying stocks of popular brands like Moutai [6][7]. - The second method involves investing in gold as a hedge against currency devaluation and inflation, especially during times of geopolitical uncertainty [9]. - The third method is acting as a creditor by lending money and earning interest, which is a more stable but lower-yielding investment [10][11]. Group 2: Market Analysis - Historical performance of A-shares shows significant volatility, with a peak of 6000 points in 2007 and a current level around 3600 points, raising questions about future trends [15][19]. - Gold prices are also at historical highs, leading to uncertainty about future price movements [20]. - The bond market, particularly 10-year government bonds, offers low yields (1.7%), indicating a trade-off between risk and return [27][28]. Group 3: Diversification Benefits - The article advocates for a diversified investment approach, combining stocks, bonds, and commodities to reduce risk and enhance potential returns [29][31]. - A recent example illustrates how different asset classes react differently to market events, showcasing the benefits of low correlation among them [39]. - The article presents a hypothetical investment scenario demonstrating that a diversified portfolio can mitigate losses and improve recovery chances compared to a concentrated investment strategy [43][51]. Group 4: Practical Application - The article suggests a specific asset allocation strategy of 60% stocks, 30% bonds, and 10% commodities, which has yielded a cumulative return of nearly 10% year-to-date [55]. - It introduces the "Snowball Three-Point Method" for replicating a diversified investment strategy, focusing on long-term investment and asset allocation [56].

Macro News - US President Trump stated he does not plan to fire Federal Reserve Chairman Powell, despite new criticisms and not ruling out the possibility of dismissal [1] - Trump indicated that the US may maintain the tariff rates set for Japan and could reach a trade agreement with India, although he does not expect a broader agreement with Japan [1] - The EU is prepared to impose tariffs on US goods worth €72 billion (approximately $83.6 billion) if trade negotiations with Washington fail [1] Economic Outlook - The latest Federal Reserve economic report shows an increase in economic activity, but the outlook remains "neutral to slightly pessimistic," with rising price pressures due to increased import tariffs [2] - The New York Fed President Williams noted that current monetary policy is appropriate, allowing officials to observe the economy before taking further action, and warned that the impact of trade tariffs on the economy is just beginning [2] Gold Market Insights - Gold assets have gained market favor, with the RMB gold price rising 28.19% in 2024, outperforming the S&P 500 index and reaching historical highs [2] - The traditional framework of "real interest rates determine gold prices" is changing, with real interest rates having reduced predictive power since 2022 [3] - Central banks' large-scale gold purchases, challenges to dollar credit due to sanctions and fiscal deficits, and frequent geopolitical conflicts are driving gold's price increase beyond traditional models [3] - Gold's low correlation with equity assets provides excellent diversification benefits, enhancing the risk-return profile of stock-bond portfolios [3] - Given the current global macroeconomic uncertainties, gold is expected to play a strategic role in asset allocation, offering inflation and risk protection [3]