Using Shanghai Composite Index to grasp CBBC transformation

The anniversary of the Shanghai Composite Index overvalued the real economy when the set aside, to avoid from overvaluation to underestimate the fall of the process, in the process of underestimating the completion of timely entry. How much does a country's stock market have to do with its economy? Does the stock market, especially a developing country, have a barometer function?　　This is a question in the minds of many investors. In the frame of reference of Chinese investors, because of the continuity of history, the Shanghai Composite Index has been the most important reference frame of stock price level in China. If an investor asks "How many points", unless specifically specified, it should be asking the Shanghai Composite Index.　　From the situation of the index, the overall development of China's stock market basically reflects the state of China's economy. In the 12 years I have been involved in China's stock market, the Shanghai Composite Index has been used as a gauge of market temperature. July 17, 1997, the Shanghai Composite index of 1197 points, I went into the market, 5000 yuan, in a panic to hear the grapevine, at 7 yuan to buy more than 500 shares at the price of the United States to become a stake in Teda.　　By May 12 This year, the Shanghai Composite Index had experienced a 2007-year boom and a 2008 plunge, 2,618 points.　　And if the Shanghai Composite index were to be bought in July 1997, the maximum gain was 6,124 points on October 16, 2007, with earnings reaching 411%; However, from a longer period and a more macroscopic point of view, the Shanghai Composite Index is now the recovery period after the Big bear market.　　In the next few years, if the market goes back into the bull markets, the Shanghai Composite will certainly have a chance of rising sharply. The basis of this big judgment is: the European and American stock asset price is based on its strong currency and developed financial system, the financial system of Europe and the United States suffered a heavy blow, the short-term difficult to recover. Although the main emerging markets have been affected, there has been no major loss.　　Once deleveraging is done, in the role of the very loose currencies of the major governments, liquidity is bound to flood again, and in the new asset allocation landscape, emerging market equities, represented by Chinese assets, are expected to show good performance, given the undervaluation of major emerging market currencies and the underestimation of emerging market equities in future economic prospects. Historically, there have been major setbacks in the revaluation of emerging market equities, such as Taiwan's stock market rose from 600多 in 1985 to nearly 4,800 in October 1997, and then plunged to 2,300. But a year later, the index had risen to 8,800, then 12,600.　　Moreover, the fundamentals of Taiwan's economy at the time were very similar to the current Chinese economy, with the transition from a profitable growth driven by a high trade surplus to an increase in the level of valuation driven by active credit. Now, the consensus among the global investment community is that the next 10 years belong to China, and if the Chinese economy is not bullish, the global economy is a dark one.　　So investing in China, specifically, the Shanghai Composite Index, which represents the level of Chinese equity asset prices, is a sensible choice. In the 12 years since I invested in the Chinese stock market, the Shanghai CompositeMany times, there are several iconic points: June 2001 2,245, October 2007 6,124, June 2005 998, October 2008 1664 points.　　Judging from the history of the Shanghai Composite Index, the Shanghai Composite Index is sometimes significantly overvalued compared to the real economy, sometimes underestimated by the real economy, but the overall upward trend represents the upward state of China's economy. A simple buy-and-hold strategy is debatable if you want to share as much of the overall economic growth as possible.　　The most desirable strategy is to get out of the market when the Shanghai Composite Index is overestimating the real economy, to avoid the process of falling from overvaluation to underestimating, and to enter in time after the underestimation process is completed, that is, to find the right time to enter or exit from the big bull bear conversion. Is it possible to look for a change in the timing of this bull bear? This may be the dream of many investors.　　If the investment of specific listed companies, to the company's fundamental in-depth research, each company itself will not only encounter the economic cycle of all companies to face problems, as well as the specific situation of the company's industry, it is not easy to find the timing of the change of cattle bear. But looking at the investment index is different. Indices such as the Shanghai Composite Index, its stock portfolio represents the entire Chinese stock market, in a sense also represents the overall Chinese economy, as long as China's overall economy and the overall stock market has in-depth research, and according to various macroeconomic data, and then draw on the investment wisdom of some market investment experts, It is possible to grasp the timing of entering or exiting the CBBC conversion.