An investment of 1 million yuan five years ago (end of 2020) could either have made you a fortune or left you with only a trickle—ranging from a profit of over 800,000 to a loss of 830,000, the outcomes are vastly different.
1. Mainstream stocks: Generally losing money, even the 'white horses' cannot escape the shrinkage
If you had bought shares of well-known A-share companies five years ago and held them until now, most are facing significant losses, among which:
More than halved: Vanke Co., Ltd. remaining 170,000 (loss of 83%), Changchun High-tech/Tongce Medical both remaining 190,000 (loss of 81%), Longi Green Energy remaining 270,000 (loss of 73%);
Loss of 30%-50%: China Zhongjin remaining 370,000, SF Express remaining 480,000, Ping An of China remaining 530,000-630,000;
Relative resistance to declines: Kweichow Moutai remaining 730,000-830,000 (loss of 17%-27%), China Merchants Bank remaining 540,000-940,000 (loss of 6%-46%).
Two, other assets: choices determine wealth levels.
If you avoid A-shares and invest in other areas, the results are entirely different:
Gold: 1 million → 1.82 million (+820,000), benefiting from safe-haven demand and rising gold prices;
Leading US tech stocks:
Nasdaq 100 Index: based on a historical annualized rate of 16.75%, 1 million → about 2.17 million (+1.17 million);
Leading companies: betting on Nvidia, Tesla, etc., can result in theoretical returns of several times.
Cryptocurrency: Bitcoin's theoretical return exceeds 500 times, but actual returns are limited by liquidity and volatility, with real returns around 5-8 million;
Wealth management traps:
Bank wealth management claims an annualized return of 5%, but actual returns are only 1,400 yuan; @中新经纬
Franchise scams require an investment of hundreds of thousands, with a six-month income of only 3.54 yuan.
Three, the brutal truth about returns: principal, targets, and time.
Patterns of returns:
Large funds (over 100 million) with an annualized return of 8%-10% is the norm, while pursuing 15% in the tens of millions is already aggressive;
With a principal of 1 million, if annualized at 15%, compounding for 30 years could reach 64 million, but maintaining 15% continuously for 30 years is nearly impossible (Buffett only achieved 20% over 57 years);
The realistic path for ordinary people:
Diversified allocation (such as index funds + bonds), with an annualized return of 6%-10% is more sustainable;
Avoid concentrated bets: individual stocks have high volatility, while broad indices like the Nasdaq are more stable in the long term;
The critical nature of principal accumulation:
With 1 million, a 10% return is only 100,000, but rolling to 3.5 million, the same percentage increase yields 350,000;
Initially focus on accumulating principal (such as savings, stable returns), which is more practical than pursuing high returns.
Four, bloody lessons: investing is not gambling.
Difficulty of loss recovery: 1 million losing 50% leaves 500,000, needing to earn 100% to break even;
Beware of the 'get-rich-quick narrative':
Bitcoin's 5-year profit of 2.6 billion and Nvidia's hundredfold increase are mostly extreme theoretical values, not considering transaction losses and timing;
Annualized commitments of over 30% are mostly scams or short-term luck.
💎 Core summary: 1 million five years ago, deposited in a bank or buying government bonds could steadily grow to 1.3-1.4 million, but if you want appreciation, you need to take risks—choosing the right indices (like Nasdaq), gold, or top companies could double, while wrong targets (real estate stocks, P2P) could go to zero. Instead of betting on individual stocks, ordinary people should consider index investing + controlling drawdowns to seek certainty through compounding.
