How To Manage Money Under Prudent Monetary Policy

From 2011 onwards, China will implement positive measures.

Not return

The shift of monetary policy to stability does not mean that China has regained its interest rate cycle.

The government is still very cautious about raising interest rates, because the "blow up" of the rate hike will be large, and if other means work, it will not lightly raise interest rates.

First, the developed economies such as Europe, America and Japan are still in recession. China's sharp increase in interest rates will stimulate overseas capital inflows into China's arbitrage.

Secondly, in order to cope with the international financial crisis, the scale of local government financing has been very large in recent two years. The sharp increase in interest rates will lead to the local government debt crisis and seriously inhibit the impulse of local government investment, which is not conducive to maintaining rapid economic growth.

Third, a substantial increase in interest rates will greatly increase the repayment burden of housing mortgage loans for the residents. In the context of shrinking inflation and residents' income, a substantial increase in repayment expenditure is not conducive to social stability.

The stock market fluctuates little.

Over the past few years, the stock market has been down several times, and recently maintained a sideways shock.

The author found that most investors did not see clearly the future policy trend before, but with the introduction of prudent monetary policy, they told the participants of the stock market that monetary policy should be adjusted from moderate easing to prudent monetary policy, but this could not be a step by step adjustment, but a gradual and pragmatic adjustment.

So for the stock market, it should be a reassurance, and the stock market is unlikely to rise or fall.

Of course, monetary policy from "loose" to "steady" will reduce the mobility of the whole society.

The contraction of monetary policy has a negative effect on stock market liquidity.

At the same time, in China's four main investment markets, only the stock market has no policy pressure and returns are still attractive, and the liquidity of other markets is more likely to enter the stock market.

Under such a positive and negative two major liquidity factors, the liquidity of the stock market may be neutral next year, and investors should not be too pessimistic.

At the same time, in the short term, investors have fully anticipated the shift of monetary policy. Therefore, the return of monetary policy to the stock market will not be too great.

Low risk allocation

The return of monetary policy to stability is more constricted in the eyes of the market to curb liquidity and curb inflation expectations.

In this regard, financial experts suggest that the monetary policy shift will make the uncertainty of investment market facing more investment next year. When investors participate in high risk financial products such as stock market and futures, it is better to properly configure low-risk financial products such as bonds, monetary funds and gold, which is conducive to balancing investment risks and the possibility of winning inflation.

Judging from the current market situation, the bond market is still showing a steady trend, and the return is also slightly higher than the one year fixed deposit.

At the same time, money market funds can also be properly allocated. At present, China's monetary fund mainly invest in treasury bonds, commercial bills, bank certificates of deposit, short-term government bonds and other short dated securities. It is the lowest risk among all funds. It has the term "quasi savings", and the average annual return rate is higher than that of the bank's one-year fixed deposit.

Therefore, it can be used as one of the investment channels in the interest rate cycle.

In addition, gold has been climbing up to $1400 in recent years, and its investment value is beyond doubt. Investors can buy in the right time and gain larger profits through the difference.