Large-scale assets refer to assets with similar income characteristics and investment purposes, such as stocks and bonds, which belong to large-scale assets.
The most classic asset rotation strategy is Merrill Lynch clock strategy.
Merrill Lynch clock strategy
Merrill Lynch investment clock is an investment strategy put forward by Merrill Lynch, which effectively combines asset allocation, industry rotation, bond yield and economic cycle, and rotates among bonds, stocks, commodities and cash.
Merrill Lynch clock strategy uses different combinations of economic growth and inflation to determine the economic cycle, and then determine the main investment direction.
Let's understand the underlying logic of this strategy.
In the economic upswing and behavioral recovery stage under inflation, the performance of stock assets is the best.
When the economy goes up and inflation is overheated, commodities perform best.
In the stagflation stage of economic downturn and inflation, cash assets are the most attractive.
When the economy goes down and the behavior declines under inflation, bond assets dominate the screen.
After understanding the economic cycle, investors only need to judge the economic cycle, and then choose the most suitable assets as the main investment direction, and they can get a satisfactory return on investment.
Main points of Merrill Lynch clock strategy method
There are two key points in Merrill Lynch's clock strategy: 1, which are the judgment of economic cycle and inflation level. 2. Choosing excellent funds to invest in different types of assets can fully achieve these two points and basically get their own satisfactory returns.
If you want to do these two things well, it is not difficult to say that it is difficult, and it is not simple to say that it is simple.
The judgment of economic cycle and inflation is actually a professional category, which needs to be applied to GDP growth rate, PPI, PMI, CPI, money supply, fiscal policy and other indicators.
On the other hand, selecting excellent funds from different asset classes is also a test of investors' professionalism. First of all, investors are required to have a basic understanding of various funds in order to choose a suitable pool of funds.
To sum up, Merrill Lynch's clock strategy is a relatively advanced fund trading strategy, which is more suitable for investors who already have certain investment experience and want to further master investment skills. For beginners, it is very difficult.
Advantages and disadvantages of Merrill Lynch clock strategy
Without a perfect trading method, Merrill Lynch's clock strategy has both advantages and disadvantages.
Look at the advantages first.
Merrill Lynch's clock strategy covers four categories of assets (bonds, stocks, commodities and cash), and the rotation model is relatively perfect. Theoretically, it can ensure that investors can get good returns in different economic cycles and reduce thunder.
Moreover, Merrill Lynch's clock strategy avoids the shortcomings that a single investment product needs to endure and wait in a specific period.
Look at the shortcomings again.
Merrill Lynch's clock strategy is a highly idealized model, and the American market has developed very well. This strategy has strong applicability in the United States, but its effectiveness is relatively weak in China.
European and American markets are relatively laissez-faire, and China often conducts counter-cyclical regulation. Effective macro-control ensures the smooth operation of the economy, and the boundaries between different economic operation cycles are relatively vague.
In addition, Merrill Lynch's clock strategy needs to accurately judge and interpret the macroeconomic cycle, monetary and fiscal policies, industrial structure support and adjustment policies. Its professional requirements are relatively new and difficult to use, which is also its shortcoming for ordinary investors.
I hope the above contents are helpful to you.