As a practical investment tool, many investors do not know much about ETFs.
Some people think that ETFs are rising very slowly;Some people think that ETFs are just a low-profile version of **, and some people even think that ETFs are only invested in by rookies.
However, these are all misconceptions about ETFs.
In fact, ETFs are both complex and flexible investment vehicles that can be used in a wide range of applications and operate in a variety of ways.
Really good to use,ETFs can achieve returns that are not inferior to pure stock selection, while significantly reducing investment risk and reducing the effort required to invest.
In this article, I will talk to you about the investment strategy of ETFs and some potential investment opportunities.
I rely heavily on ETFs for my personal investments, so I highly recommend ETFs to be included in my portfolio.
At the same time, don't think that ETFs are just brainless tools suitable for investing in rookies.
In fact, it is extremely valuable to investors at different stages, but there are differences in application methods and strategies.
I think the investment strategy of ETFs can be divided intoBeginner, intermediate, and advancedThere are three stages, each with a unique investment approach, target and target group.
After reading this article, I believe you can find the best way to invest in ETFs for you.
However, I suggest that you don't rush into dividing your own levels for the time being, and follow my train of thought first, sometimes you may think that you are in the third level, but in fact you may not be able to say in the first level.
The beginner play is great for novice investors, but it's not limited to novice investors.
The beginner play is not only for novice investors, but for many beginnersThe most challenging thing is not the so-called stock selection and timing, but the establishment of a correct understanding of market risks.
Many people are never aware of this. Think about it, what are the key factors that determine whether a newbie can successfully invest in the ** market?
You may have money in mind, but in reality, the decision of both hands depends on the risk.
Novice investors tend to exhibit two extremes of riskOn the one hand, it is extremely afraid of risks and does not dare to set foot in the market;On the other hand, it is a complete neglect of risks and the pursuit of returns.
The final result may be that you dare not invest, miss the opportunity, or you may be able to wave goodbye after losing money, and continue to operate until you lose money.
Therefore, the key to sustainable profitability in the market is whether you can establish a correct understanding of the risks from the beginning.
Investing in ETFs is an important tool for novice investors to understand investment and control risks.
Why?
First of all, we need to be clear about the risks. There are two main sources of riskOne is ** risk and the other is systemic risk.
*Risk refers to the risk that is unique to a**, such as the financial fraud of Luckin Coffee or the elimination of Nokia by the times.
Systemic risk can be understood as the overall risk faced, such as the pressure on the valuation of long-term interest rates, the impact of the epidemic on the valuation, etc.
In this case, all ** in the market will be affected by these uncertainties, and systemic risk is difficult to control. In contrast, risk can be controlled.
Investing in ETFs is the most effective way to control risk, and it's no exaggeration.
The ETF itself is a portfolio that contains many**, and the risks are offset by each other, achieving diversification, leaving only systemic risk. As a result, ETFs are much less risky than direct investments** and have more modest share price fluctuations.
It is not easy for professional investors to beat, let alone our new entrants.
Therefore, we don't need to envy those so-called gods who show short-term ultra-high returns. In the long run, it is not certain who will kill the deer.
Investing is a long-term processIf you enter with a long-term investment mindset, you have outperformed the vast majority of currently existing participants.
For novice investors, the best way to get started is to invest in an index with a fixed amount on a regular basis.
The ETF I currently use is as low as the full commissionTen thousand 04, compared with **, regular investment has more advantages.
Indices are the ETFs with the best risk control. This regular investment method is a very suitable investment method for novices, especially those office workers who do not have time to keep an eye on the market.
As we all know, the A** field has shown a ** trend most of the time. In this market environment, ETF regular investment has become a rare investment magic weapon.
The logic is extremely simple, through regular purchase in batches, the cost of holding is evenly spread, so as to diversify the risk and bring both stable and comfortable returns.
In terms of stability, ETF regular investment is a long-term investment strategy that can achieve compound interest growth, especially suitable for those with limited income and few assets.
In terms of comfort, since the index is not an individual**, it will inevitably experience**, while ETF regular investment is not affected by short-term ups and downs or returns, avoiding discomfort or headaches due to market fluctuations.
In addition, there is no need to choose** for ETF regular investment, and the requirements for timing are also low.
Of course, regular investment is not blind investment, and it usually adopts the method of valuation fixed investment, which does not set a stop loss, but only a take profit.
If you are optimistic about a broad-based ETF, especially if the index it tracks is relatively undervalued, you can start to invest a certain percentage (such as 20%) on a payday, or invest regularly at a time such as the end of the month, which is equivalent to saving every month.
Then, resolutely do not stop the loss within a certain period of time, and continue this operation patiently to complete the process of amortizing the cost of holding the position. As soon as the market starts** or trendes, get instant gains. When the index is relatively overvalued, take profit and sell in time to make a profit, forming a virtuous circle.
This investment method cleverly solves the problem of no time to keep an eye on the market and no technology
It easily overcomes the fear and greed in human nature and avoids falling into the trap of "chasing up and down", which can be called a weapon for "lazy people" and "busy people".
As for whether to invest on a monthly or weekly basis, and the amount of each regular investment, you can arrange it according to your personal preferences and financial situation, and in the long run, the investment frequency has little impact on the results.
Manual or intelligent investment will not affect the efficiency of fund use.
As for when to undervalue and when to overvalue, many financial ** or apps provide daily updates, and the valuation of each broad-based index is clear at a glance.
In the early stages of an ETF, you don't need to judge the market too much and you don't have to go deeper**.
This stage is designed to allow you to gradually understand the market and build investment knowledge with the right mindset.
Understand that this is not an easy task, and if you can do it, it is better than many investors.
After successfully mastering the beginner play of ETFs, if you still have an active investment mentality, you must have a certain understanding of the market at this time, and you may have begun to be optimistic**.
Then you're ready to step into the intermediate play of ETFs.
Due to space constraints, I will continue to take you to the end of the next article.