Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.
Author: Zhang Da

On September 20th, the Beijing Municipal Committee of the Communist Party of China issued the implementation opinions on implementing the decision of the Central Committee of the Communist Party of China on further comprehensively deepening reforms and promoting the modernization of China.

The implementation plan proposes reform tasks in 13 aspects, including improving and optimizing the functions of the capital, advancing reforms in the field of people's livelihood, establishing a modern governance system for mega-cities, and improving the system and mechanisms for coordinated urban-rural development. It is stated that these reform tasks will be completed by the 80th anniversary of the founding of the People's Republic of China in 2029.

It is worth noting that in the aspect of advancing reforms in the field of people's livelihood, the implementation plan explicitly proposes optimizing real estate policies, timely canceling the standards for ordinary and non-ordinary residences, optimizing the rules for trading residential land for commercial purposes, and reforming the financing methods for real estate development and the pre-sale system for commercial housing.

Industry insiders believe that canceling the standards for ordinary and non-ordinary residences means that both types of residences will be subject to the same requirements in terms of tax payment and other processes, which will help reduce the purchasing costs for homebuyers and stimulate the release of demand for improved housing.

Timely canceling the standards for ordinary and non-ordinary residences

In the aspect of advancing reforms in the field of people's livelihood, the implementation plan proposes improving the housing system of both renting and purchasing. It aims to accelerate the establishment of a new model for real estate development that fits the characteristics of the capital, increase the construction and supply of affordable housing, and meet the rigid housing demand of the salaried population. It also aims to improve the policy mechanisms to support the diverse housing improvement needs of urban and rural residents and leverage the role of housing provident fund in providing housing security. Furthermore, it proposes optimizing real estate policies, timely canceling the standards for ordinary and non-ordinary residences, optimizing the rules for trading residential land for commercial purposes, and reforming the financing methods for real estate development and the pre-sale system for commercial housing.

It is worth noting that this time Beijing has clearly put forward to optimize the real estate policy and timely cancel the standard of ordinary and non-ordinary residential.

Zhang Dawei, Chief Analyst of Zhongyuan Real Estate, said in an interview with Securities Times · China Securities Journal that the cancellation of the standards for ordinary and non-ordinary residential has been mentioned in the 20th Third Plenary Session held in July. There are significant differences in transaction taxes and fees, such as deed tax and value-added tax, between ordinary and non-ordinary residential properties in Beijing. The stamp duty for first-time buyers of ordinary residential properties is 1% -1.5%, while the tax rate for first-time buyers of non-ordinary residential properties is uniformly 1.5%. After two years of ownership, ordinary residential properties are exempt from value-added tax, while non-ordinary residential properties need to pay value-added tax based on the difference, with a tax rate of 5.3%.

"Since September 30, 2023, the Beijing property market has introduced 9 different levels of real estate micro-adjustment policies to adapt to market changes at that time. After the implementation of the relevant policies on May 17 and June 26, the market transaction volume has been relatively high for 4 months from May to August. Recently, the impact of policies has gradually weakened, so the signal of another policy micro-adjustment at this time is in line with market expectations." Zhang Dawei said.

Chen Wenjing, Director of Market Research at Zhongzhi Research Institute, also believes that the cancellation of the standards for ordinary and non-ordinary residential properties means that non-ordinary residential properties and ordinary residential properties will be subject to the same requirements in the process of tax payment, which will help reduce the purchase cost for home buyers, promote the release of demand for improving housing, and is also an effective measure to support diversified improvement in housing demand for urban and rural residents, and promote the construction of "good houses".

Strengthen support for multi-child families in terms of housing, transportation, education, and other aspects.

The implementation opinions also specify the improvement of population policies and service systems. Improve support policies for childbirth, establish a maternity subsidy system, improve maternity allowances and leave systems, strengthen support for multi-child families in terms of housing, transportation, education, and other aspects, and optimize maternal and child health services. Improve childcare services for young children, improve the construction of a universal childcare service system based on public kindergartens as the main channel, with embedded childcare in community institutions as an important support, and institutional childcare as an effective supplement, and explore family and community care under community management. Improve differentiated population regulation mechanisms, establish a mechanism for assessing the quality development of the population, improve monitoring and evaluation mechanisms for public service supply that are adapted to population changes, promote the mobility of relevant public services with people, and optimize the spatial distribution pattern of the population.

At the same time, actively respond to population aging, promote the coordinated development of the old-age care industry and the retirement industry. Develop the silver economy, create diversified and personalized employment positions suitable for the elderly, and create a smart and healthy old-age care new format. Implement the deployment of gradually raising the statutory retirement age. Strengthen the overall planning and layout of the old-age care service system, optimize the supply system of home-based community old-age care services, improve the quality and efficiency of institutional old-age care services, encourage and guide the active participation of enterprises and other social forces in the supply of old-age care services, support the brand-building and chain development of old-age care service operators, promote mutual assistance old-age care services, and deepen the integration of medical and old-age care. Improve the rural old-age care service system. Deepen the reform of services and support for the "older old" and improve services for the elderly such as the lonely, disabled, and incapacitated, and promote the establishment of a unified long-term care insurance system in the city.

In addition, improve the income distribution system and employment promotion mechanism. Improve the system and mechanism for coordinated distribution of initial distribution, redistribution, and tertiary distribution, improve the wage determination, reasonable growth, and payment security mechanism for workers, and improve the policy and system for factor distribution. Improve the redistribution and adjustment mechanisms such as social security and transfer payments. Improve the system for the development of charitable undertakings. Increase the property income of urban and rural residents through multiple channels, effectively increase the income of low-income groups, steadily expand the middle-income group, and reasonably regulate excessive income and ban illegal income in accordance with the law. Deepen the reform of the wage determination mechanism of state-owned enterprises, improve the supervision system for the salaries, allowances, and subsidies of leaders at all levels of state-owned enterprises.

A sound social security system. Improve the funding and reasonable adjustment mechanism for basic pension and basic medical insurance, steadily increase the basic pension and welfare pension standards for urban and rural residents. Expand the scale of entrusted investment of social security funds, improve the fund management system and safety supervision system, and achieve value preservation and appreciation of the funds. Improve the participation policy of flexible employment personnel, expand the pilot coverage of occupational injury insurance for personnel in new forms of employment, and expand the coverage of unemployment, work-related injury, and maternity insurance. Accelerate the development of a multi-level and multi-pillar pension insurance system, expand the coverage of the pension system, and actively encourage the participation of individuals in the pension insurance. Give full play to the role of various commercial insurance in supplementing coverage, and improve the "Beijing Inclusive Health Insurance". Deepen the reform of medical insurance payment methods, improve the system of serious illness insurance and medical assistance, increase the level of maternity insurance benefits, and build a three-dimensional supervision system for the supervision of medical insurance funds.

Editor/Jeffy