Core Insights - The event "Investment for Good" focused on ESG and charitable asset management, highlighting the evolving landscape of investment strategies in response to global economic changes [1] Group 1: Economic Cycles and Asset Classes - The current economic environment is characterized by a shift from a US-centric globalization cycle to a more diversified approach, influenced by de-globalization and varying monetary policies across developed nations [3] - The long-term risk-return profile for investments has declined due to prolonged monetary easing in the US and increased demand for long-term government bonds in China, complicating the achievement of return targets [4] - There is a notable correlation between stock and bond market volatility, driven by excessive liquidity, prompting a strategy shift towards alternative assets like gold [4] Group 2: Asset Class Outlook - Short-term prospects for US dollar assets appear positive due to potential economic soft landing, but long-term attractiveness may diminish due to rising credit risks and increasing dollar monetization [5] - The Chinese yuan is expected to face short-term appreciation pressure, supported by improving growth dynamics and foreign capital inflows, while long-term trends suggest a gradual upward trajectory [5] - Commodity outlook indicates that oil prices are likely to remain within a certain range, while gold is viewed as a strong hedge against portfolio risk due to its low correlation with the dollar [6]

Core Viewpoint - In 2024, major asset classes generally recorded positive returns, but performance varied significantly among them, with large-cap stocks outperforming small-cap stocks and gold showing substantial gains [1][3][6]. Summary by Sections Asset Performance - Large-cap stocks achieved a return of 18.24%, significantly higher than the 2.79% return of small-cap stocks [2][4]. - Long-term government bonds yielded 9.38%, with approximately 6.9% of this return attributed to price increases from declining interest rates [4]. - Newly included gold assets saw a remarkable increase of 28.19% [5][6]. Long-term Return Effectiveness - The report addressed concerns regarding the long-term return calculations from 2005 to 2024, confirming that the historical returns are stable and provide valuable reference for investors [8][10][11]. - The current price-to-earnings (PE) and price-to-book (PB) ratios are lower than those at the end of 2004, indicating that the long-term return rates of the Chinese stock market are objectively stable [10][11]. Gold's Long-term Returns - From 2003 to 2024, Shanghai gold had an annualized return of 8.98%, while London gold from 1969 to 2024 had a return of 7.66% [13]. - Gold's performance is highly cyclical, with significant returns during periods of high inflation and geopolitical risk, but underperforming during stable economic conditions [14][15][16]. Diversification Benefits - The report illustrated the advantages of diversification, showing that as the number of stocks in a portfolio increases, the average return becomes more concentrated and predictable, reducing the risk of individual stock failures [18][19]. - Holding more than 10 stocks leads to diminishing returns in terms of average yield improvement, while the volatility approaches the market's systemic risk [19]. Risk Premium Analysis - The report decomposed the long-term risk premiums of various asset classes, indicating that all risk premiums are positive, with stocks offering the highest risk premium [22][23]. - The characteristics of risk premiums in China are similar to those in the U.S., suggesting that higher risks are compensated with higher returns over the long term [23].