Projected Annual Return (%) | |
Singapore | ![]() |
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Spain | ![]() |
Australia | ![]() |
UK | ![]() |
Hong Kong | ![]() |
Italy | ![]() |
Belgium | ![]() |
Canada | ![]() |
France | ![]() |
Netherlands | ![]() |
Korea | ![]() |
Germany | ![]() |
Switzerland | ![]() |
Sweden | ![]() |
USA | ![]() |
Japan | ![]() |
Emerging Market: | |
Turkey | ![]() |
Indonesia | ![]() |
Russia | ![]() |
Mexico | ![]() |
India | ![]() |
China | ![]() |
Brazil | ![]() |
Stock | Price | Price Change |
---|---|---|
SZSE:300742 | CN¥ 25.66 | CN¥4.28 (20.02%) |
SZSE:300595 | CN¥ 104.14 | CN¥17.36 (20.00%) |
SZSE:300507 | CN¥ 12.01 | CN¥2.00 (19.98%) |
SHSE:688339 | CN¥ 269.90 | CN¥40.07 (17.43%) |
SZSE:300769 | CN¥ 157.00 | CN¥21.70 (15.82%) |
SZSE:002626 | CN¥ 30.24 | CN¥-2.91 (-8.75%) |
SHSE:603863 | CN¥ 11.26 | CN¥-1.04 (-8.46%) |
SZSE:002813 | CN¥ 34.43 | CN¥-2.99 (-7.96%) |
SHSE:600793 | CN¥ 19.70 | CN¥-1.56 (-7.34%) |
SZSE:003026 | CN¥ 101.36 | CN¥-7.16 (-6.63%) |
Based on these historical valuations, we have divided market valuation into five zones:
Ratio = Total Market Cap / GDP | Valuation |
---|---|
Ratio ≤ 41% | Significantly Undervalued |
41% < Ratio ≤ 53% | Modestly Undervalued |
53% < Ratio ≤ 65% | Fair Valued |
65% < Ratio ≤ 77% | Modestly Overvalued |
Ratio > 77% | Significantly Overvalued |
Where are we today (2021-01-20)? | Ratio = 67.04%, Modestly Overvalued |
From the equation presented on the U.S. market valuation page,
Investment Return (%) = Dividend Yield (%) + Business Growth (%) + (Re/Rb)(1/T)-1
We can compute the predicted and actual returns of the China stock market over a given time period, T. In the calculation, we set T to equal eight years, the approximate length of a full economic cycle. The calculated results are presented in the chart below. The green line indicates the expected, or predicted return if the market ratio trends near the recent 10 years average ratio of 59.14% over the next eight years.
The blue line indicates the actual, annualized return of the China stock market over eight years. We use “Shanghai Composite Index” to do the actual return calculation. We can see the calculations largely predicted the trend in the stock market as the blue line is closely parallel to the green line.
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