Core Viewpoint - The article discusses the importance of historical data in understanding market cycles and the impact of index rule changes on valuation metrics. Group 1: Historical Data Reference - Historical market cycles typically last 7-10 years, and analyzing only 2-3 years of data can lead to incomplete insights [2] - It is recommended to find similar style indices with longer historical data for reference, as they tend to exhibit similar performance trends [3] Group 2: Index Rule Changes - Changes in index rules can significantly alter valuation metrics, making historical valuations less relevant [5] - For example, the change of the CSI 100 index name to CSI A100 shifted its selection criteria from market capitalization to a leading stock strategy, affecting its valuation [5] - The H-share index also underwent changes, increasing from 40 to 50 stocks, which included more internet companies, thus altering its historical valuation reference [6] Group 3: Valuation Calculation Methods - Different weighting algorithms in index valuation can lead to changes in percentile rankings [6] - The CSI Dividend Index transitioned from a market-cap weighted approach to a dividend yield weighted approach, which significantly changed the representation of bank stocks within the index [8][9] - The actual P/E ratio of the CSI Dividend Index is around 9-10 times, contrasting with the lower P/E ratio calculated using the previous market-cap weighting method [9] Group 4: Economic Downturns - During economic downturns, declining profits can lead to an increase in P/E ratios, which may not reflect actual stock price increases [11][13] - Indices like CSI 1000 and CSI 2000 have experienced profit declines over the past two years, necessitating the use of stable financial metrics for valuation [14] - In cases of unstable or declining profits, the price-to-book ratio may serve as a more reliable valuation metric [15]

Core Viewpoint - The article discusses the importance of historical data in understanding market cycles and the impact of index rule changes on valuation metrics. Group 1: Historical Data Reference - Historical market cycles typically last 7-10 years, making it essential to consider longer time frames rather than just 2-3 years to avoid incomplete analysis [2]. - It is recommended to find similar style indices with longer histories for reference, as they tend to exhibit similar performance patterns during different market phases [3]. Group 2: Index Rule Changes - Changes in index rules can lead to significant valuation shifts, making historical valuation data less relevant [5]. - For example, the change of the CSI 100 index name to CSI A100 altered its selection criteria from market capitalization to a leading stock strategy, affecting its valuation [5]. - The H-share index's transition from 40 to 50 stocks, including more internet companies, also resulted in a loss of reference value for historical valuations [6]. Group 3: Valuation Calculation Methods - Different weighting algorithms in index valuation can lead to changes in percentile rankings, impacting the perceived valuation metrics [6]. - The CSI Dividend Index's shift from market capitalization weighting to dividend yield weighting significantly altered its composition, affecting its valuation calculations [8][9]. Group 4: Economic Downturns - During economic downturns, declining profits can lead to an increase in price-to-earnings (P/E) ratios, which may not reflect actual stock price increases [11][13]. - For instance, small-cap indices like CSI 1000 and CSI 2000 have experienced profit declines over the past two years, necessitating the use of stable financial metrics for valuation [14]. - In cases of unstable or declining profits, the price-to-book (P/B) ratio may serve as a more reliable valuation metric [15].

Core Viewpoint - The article emphasizes the importance of strategic asset allocation for families to optimize their wealth management and investment returns [1] Group 1: Industry Insights - The current market environment presents both challenges and opportunities for investors, particularly in the context of rising interest rates and inflation [1] - Diversification across various asset classes is highlighted as a key strategy to mitigate risks and enhance returns [1] Group 2: Company Analysis - Companies that adapt to changing market conditions and consumer preferences are more likely to succeed in the long term [1] - The article discusses specific sectors that are expected to perform well, including technology and renewable energy, due to their growth potential [1]

Core Viewpoint - The article discusses the current market conditions, emphasizing the importance of understanding index valuation percentiles and the associated risks when making investment decisions. Market Overview - The major indices, such as the Shanghai and Shenzhen 300, have shown little fluctuation, while small-cap stocks have slightly declined [2][4]. - Value and dividend styles have seen minor increases, whereas growth styles have experienced slight declines [3][4]. - After a significant drop in early April, global markets have rebounded over the following weeks, but have recently entered a period of sideways movement [5][6]. Index Valuation Percentiles - The article highlights that percentile rankings can be a useful reference for current valuations in historical contexts [7][8]. - A 30% percentile indicates that 30% of historical valuations were lower than the current one [9]. Risks Associated with Percentile Valuation 1. **Short Historical Data**: Relying on a short time frame for index data can lead to misleading conclusions. Historical data should ideally encompass multiple market cycles [12][13]. - Solution: Use longer historical indices of similar styles for reference [14][15][16]. 2. **Changes in Index Rules**: Modifications in index selection criteria can alter valuation metrics, making historical comparisons less relevant [18][19][20]. - Solution: Recalculate historical valuations based on new rules [21]. 3. **Different Valuation Weighting Methods**: Variations in how indices calculate valuations can lead to discrepancies in percentiles. For example, the dividend index's valuation can differ significantly based on whether it is market-cap weighted or dividend-yield weighted [22][23][24][28]. - Solution: Calculate valuations based on the actual stocks held in the index [29]. 4. **Economic Downturns**: During economic slowdowns, declining earnings can artificially inflate price-to-earnings ratios, skewing percentile rankings [5][30]. - Solution: Use stable financial metrics for valuation when earnings are volatile [30][31]. New Features and Tools - A new feature in the "Today Stars" mini-program has been launched, allowing users to access ETF valuation tables and identify undervalued ETFs [32][35]. - The program provides real-time data on ETF valuations, including premium/discount rates and historical valuation data [35]. Investor Engagement - The article encourages investors to share their experiences and thoughts, particularly regarding the three-year anniversary of the investment strategy, highlighting the importance of perseverance during market downturns [40][41].