Now Cash Is King &Nbsp; No Investment Is The Best Investment.

Chen Sijin, a senior consultant in risk management at the global investment department of an international financial consortium, now resides in Toronto. Zeng Rui Xin, assistant vice president of securities investment department, vice president of Bank of America Securities, and senior consultant of Manulife Financial consortium.

In 2012, I looked at the global economy as follows:

First, in Germany's lead Europe will tighten its policies to save the euro, which will lower the standard of living, so Europe may face the turmoil of the government.

Second, in the past few years since the outbreak of the economic crisis in the United States, emerging economies, including China, have received large amounts of hot money because of the ease of money in the US, making their economic development basically bubble. Since the beginning of this year, the European Union and the European Union will not be able to continue to implement a big monetary easing policy, and the bubble will burst.

Third, the US economy seems to have bottomed out. It should have continued to recover this year. But in 2012, it was the election year of the United States. There are many uncertainties in politics. The political crisis may cause the economy to decline again. The possibility of a loose monetary policy will not be great enough, and the unemployment rate will remain high, so the housing prices will continue to fall. In short, even if there is a small monetary easing in Europe and America, it is only to increase liquidity and do not generate high inflation. Therefore, Europe and the United States will continue to decline this year and drag major emerging economies.

Now, when the global economy is so sluggish and uncertain, where do ordinary people put their money in the best investment?

according to Sino German Allianz Alliance A recent life-insurance company survey shows that Chinese rich people have begun to increase cash holdings and reduce investment in the stock market, housing market and other fields. This is a response to my financial strategy put forward at the end of 2010, "cash is king, not investment is the best investment".

Why do we say so? Because the global economy is now deleveraging, de foaming and debt paying, and is experiencing a great recession comparable to 1930s, which will last for 10 years, 15 years or even longer. Under such an international situation, it is quite difficult for Chinese people to rely on investment and wealth management.

Because of inflation in the past few years, almost all asset prices have been inflated. And people generally expect inflation to continue. Many people think that cash will become more and more depreciated. Therefore, cash can not be left on hand, and must be invested. Only in this way can wealth be preserved. But in fact, just in the past 2011 years, the overwhelming majority of investors had been buying stocks and share prices, buying fund funds, buying houses and housing prices, and almost buying anything.

Actually, depreciation is a relative concept. For example, suppose you had 500 thousand yuan 5 years ago, when the housing price was 5000 yuan / square meter, you bought a 100 square meter house. Now the house price has risen to 10 thousand yuan / square meter, if you did not buy a house then, instead of putting money on the national debt, it will be 5% interest per year, and 5 years later, the interest rate will be 625 thousand yuan. Compared to the 1 million yuan house price, your money has depreciated by 375 thousand yuan; however, for a while, if you have 1 million yuan in cash now, you will not buy a house and wait for the house price to fall 30% next year, which means that you have 1 million yuan now, and then you can buy a house close to 143 square meters, that is, your current 1 million yuan will appreciate 43%!

The economic crisis we are experiencing now is actually an amendment to the bubble economy. The bigger the bubble, the more intense the economic crisis will be. But deflation is inevitable after inflation, just like the natural law of tide rising and falling. In a desperate attempt to control the market with people's will, it will only be more strongly rebounded by the market.

So, inflation is still widespread and asset prices are widespread. foam Under the circumstances, cash is king, not investment is the best investment. Because the ultimate goal of financial management is to keep wealth, rather than to make money by relying on financial management. Wealth management can prevent wealth from being eroded by inflation or minimize the extent of erosion. If the return on investment and finance can slightly exceed the inflation rate, it will be pretty good.

Finally, I want to make a special point here that the "cash" mentioned here does not mean that you can put money in your home under a pillow, or in a low interest deposit account of a bank. Instead, you should buy some financial products with guaranteed capital and fixed return, such as certificate bond, on the premise of keeping the principal. As long as we win CPI, that is victory.