Core Viewpoint - The article discusses the significance of the three-year annualized return of equity funds as a timing indicator for market trends, particularly in the context of the recent bull market in A-shares [2][11]. Group 1: Historical Context and Analysis - The three-year annualized return of equity funds has been a focal point since the first wave of the bear market in 2022, highlighted by investor Dong Chengfei [3][4]. - Historical peaks of the three-year annualized return occurred in 2015 and 2021, both exceeding 30%, indicating a doubling of total returns over three years [4][17]. - The article references past bull and bear market cycles, noting that bull markets typically last between 2 to 3 years and 2 months [15]. Group 2: Future Projections - The author suggests that the bottom of the current bear market may occur in early 2024, with potential subsequent lows in mid-2024 [8][22]. - The analysis indicates that if the bear market bottom is established in early 2024, a three-year projection could lead to a peak around early 2027, assuming a minimum return of 30% [20][24]. - The potential for a bull market is further supported by the observation that the current three-year rolling annualized return is still negative, suggesting that the market has not yet reached a bubble phase [24][32]. Group 3: Market Dynamics and Fund Performance - The article notes that the equity fund index has seen a cumulative increase of 46.8% since its bottom on February 5, 2024 [28]. - To achieve a three-year annualized return of 30%, a potential increase of 49.66% is required, emphasizing the importance of compounding effects [30][32]. - The performance of equity funds may not align perfectly with the broader A-share market, indicating that future trends could diverge based on market conditions [30][32].

Core Viewpoint - The article discusses the historical patterns of bull and bear markets in the A-share market, emphasizing the importance of valuation uplift as a primary driver of market performance, and the role of active management in different market phases [3][4][6][14]. Group 1: Historical Market Patterns - Since 2000, there have been six identifiable bull and bear cycles in the A-share market, with each cycle showing a consistent pattern of valuation uplift driving market performance [3]. - The first bull market (2005-2007) was unique as it was driven by both valuation uplift and a comprehensive economic recovery, while the subsequent five bull markets were primarily driven by valuation uplift alone [3][4]. - The current bull market (2024.09-present) has seen a valuation uplift from 12 to 16.2 times, representing a 35% increase, driven by policy support and liquidity easing [3]. Group 2: Active vs. Passive Management - In the early stages of a bull market, passive index funds (ETFs) tend to outperform due to their high exposure to the rising market [6][8]. - As the market matures, active management funds leverage their expertise to identify high-potential stocks, often outperforming passive funds [8][9]. - Historical examples show that during the mid to late stages of bull markets, active funds can significantly exceed index performance, highlighting the importance of active management in volatile markets [9][13]. Group 3: Market Participation - The article emphasizes that the timing of market peaks and troughs can only be understood retrospectively, suggesting that continuous market participation is essential for capitalizing on opportunities [14][16]. - It advocates for a balanced approach to investment, combining both active and passive strategies to navigate the complexities of the market [13].