Analysis of the Earnings Decline Trend of High-Net-Worth Investors and the Impact of Market Environment

This analysis is based on the 2016-2025 investment real-trading summary of an individual investor [0], whose capital scale grew from 1 million to 10 million, and annualized return dropped from an early 18.1% to 13.78%. Combining market data and research, the earnings decline mainly reflects the following market environment changes:

1. Normalization of long-term interest rate decline
   : From 2016 to 2025, the central bank implemented multiple RRR cuts and interest rate reductions [1][2], compressing the return space of traditional financial products, and high-net-worth investors faced the challenge of “asset shortage”.
2. Accelerated asset rotation and style switching
   : Under the changes in global political and economic situations, the difficulty of equity asset allocation has increased, and the A-share market has switched from growth stocks to the “China Special Valuation” style [5], increasing the complexity of investment decisions.
3. Emergence of capital scale effect
   : When the capital scale exceeds the threshold of 1 million, factors such as liquidity constraints (impact of large transactions on stock prices), target selection limitations (reduction in high-quality targets that can accommodate large-scale capital), and rising transaction costs jointly lead to earnings decline [5].

1. Earnings decline is not an isolated case
   : Hurun Report shows that the investment returns of high-net-worth individuals have shown an overall downward trend since 2020 [3], and the investor’s 13.78% annualized return is still higher than the average level of the CSI Active Stock Fund Index (12-14%) [5], reflecting the effectiveness of their strategy adjustments.
2. Strategy evolution and market adaptability
   : The investor’s strategy adjustment from long-term holding to band operation, multi-platform diversified investment and arbitrage [0] is a positive attempt to cope with market environment changes and capital scale growth.
3. Potential value of risk control tools
   : Although the effectiveness of the self-created “Bogle Market Thermometer” has not been publicly verified, it reflects the refined demand of high-net-worth investors in risk control [0].

• The earnings decline has certain sustainability: Market environment changes such as low-interest-rate cycle and accelerated asset rotation are expected to continue for a long time [1][2].
• The marginal difficulty of capital scale growth increases: When the capital scale expands further, liquidity constraints and target selection limitations will become more obvious [5].

• Space for refined asset allocation: Through diversified strategies, arbitrage opportunity mining, etc., there is still an opportunity to obtain stable returns in a low-yield environment [0].
• Potential of alternative asset allocation: High-net-worth individuals are gradually shifting from real estate to alternative assets such as gold [3][4], providing new directions for portfolio diversification.

1. The earnings decline of high-net-worth investors is the result of the combined effect of market environment changes (low interest rates, asset rotation) and capital scale effect.
2. The investor partially alleviated the pressure of earnings decline through strategy adjustments (band operation, diversified investment), and their 13.78% annualized return is still at a good market level.
3. The earnings decline has certain sustainability risks; in the future, more refined asset allocation and diversified strategies are needed to cope with the challenges brought by capital scale growth.
4. The self-created risk control tool reflects the investor’s awareness of coping with market fluctuations, but its effectiveness needs to be verified.