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].