The Application Of Circle Investment Strategy Under The Guidance Of Currency Cycle In China

Chinese economy has experienced a rapid development since the reform and development, which, of course have led to the birth of a large number of the rich class. With the increase of wealth and the growth of age, the financial needs to keep and increase the value of wealth of that kinds of people are growing. While the subprime mortgage crisis happened in2008makes people have a clearer understanding of the cruelty of the capital markets, asset allocation theory conforms to the call of the times, and formally entered China. However, due to the stage of development of the domestic and international economy, as well as the difference of economic growth models, which, finally resulted in that some famous concepts and theories which are suitable for foreign countries cannot achieve the desired effects in china, that is to say, we are in urgent need of some more Chinese characteristics economic theory and indicators to guide our investment, and currency cycle theory is one of them.The paper is divided into four parts. The first part describes the background and significance of this study, the second part is the elaboration review of some of the previous about Currency cycle theory, asset allocation theory and what kind of innovations we have in this article, the third part is the main part of our empirical research, mainly including how we divided the monetary cycle of our country’s economy for the past13years, how we partition the cyclical industry and non-cyclical industries and build the corresponding index respectively. Besides, we test and empirical research the validity of the wheel dynamic investment by the guide of the monetary cycle by the methods of descriptive statistics and build a time series which include a dummy variables, as well as future yield prediction of the model. The fourth part, which mainly gives some conclusions and recommendations derived from above analysis.All in all, in this paper, we use a viable monetary cycle division method, make the comparison between the market yields and the payments of the wheeled dynamic investment directed by the two industries index, and finally through the descriptive statistics and time-series model, indicating that investment through the implementation of wheeled dynamics strategy under the guidance of the monetary cycle can really performance much better than market returns yield, which is, hopefully, to introduce some new ideas and lessons of the asset allocation for the futurity.