What if you bought Shanghai Composite in 1995?
Countries · China. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play6.0× · S&P 500 same money: $14,783
$1,000 in Shanghai Composite at the start of 1995 would be worth about $6,000 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
The Shanghai Composite covers stocks listed in Shanghai, a market dominated for years by state-owned banks, oil companies and industrials, and by millions of retail traders. Founded in 1990, it spent the early 2000s drifting while China's economy grew at a ferocious pace. Then came a frenzy: between 2005 and late 2007 the index rose roughly fivefold, as share reforms and a wave of new investors piled in, before losing around two-thirds in the global crisis.
A second bubble inflated in 2014-15, fuelled by margin lending and state media cheerleading, and burst that summer despite heavy government intervention to support prices. A circuit breaker introduced in January 2016 was scrapped within days after it accelerated the selling. Since then the index has largely moved sideways, even as China became the world's second-largest economy. Weak shareholder returns, heavy issuance of new shares and a slump in the property sector all played their part.
The lesson: Rapid economic growth does not guarantee stock market returns, because dilution, governance and the price paid decide what shareholders actually receive.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 1995 | $650 | $6,000 | $14,783 | 6.0× |
| 2000 | $1,400 | $2,786 | $4,626 | 2.8× |
| 2003 | $1,350 | $2,889 | $7,727 | 2.9× |
| 2005 | $1,250 | $3,120 | $5,763 | 3.1× |
| 2007 | $2,700 | $1,444 | $4,789 | 1.4× |
| 2008 | $5,300 | $736 | $4,626 | 0.7× |
| 2010 | $3,200 | $1,219 | $6,071 | 1.2× |
| 2012 | $2,200 | $1,773 | $5,312 | 1.8× |
| 2015 | $3,300 | $1,182 | $3,301 | 1.2× |
| 2018 | $3,300 | $1,182 | $2,519 | 1.2× |
| 2020 | $3,050 | $1,279 | $2,092 | 1.3× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 1995, turning $1,000 into $6,000. The S&P 500 from that same year: $14,783.
On this day
- 4 January 2016: China's new circuit breaker trips on day one
- 23 January 2020: China locks down Wuhan
- 27 February 2007: Shanghai sneezes and the world catches cold
- 12 June 2015: China's stock bubble peaks
- 11 August 2015: China devalues the yuan
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Shanghai Composite is one of 258 positions on the wheel — including the ones that went to zero.
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