MindMap Gallery Index funds Use the concept of value investment to select and invest using fixed investment methods 20240130
The index fund value investment method includes determining the approximate value and buying when the price is significantly lower than the value. Friends in need hurry up and collect it!
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The ice hockey schedule for the Milano Cortina 2026 Winter Olympics, featuring preliminary rounds, quarterfinals, and medal matches for both men's and women's tournaments from February 5–22. All game times are listed in Eastern Standard Time (EST).
This Valentine's Day brand marketing handbook provides businesses with five practical models, covering everything from creating offline experiences to driving online engagement. Whether you're a shopping mall, restaurant, or online brand, you'll find a suitable strategy: each model includes clear objectives and industry-specific guidelines, helping brands transform traffic into real sales and lasting emotional connections during this romantic season.
This Valentine's Day map illustrates love through 30 romantic possibilities, from the vintage charm of "handwritten love letters" to the urban landscape of "rooftop sunsets," from the tactile experience of a "pottery workshop" to the leisurely moments of "wine tasting at a vineyard"—offering a unique sense of occasion for every couple. Whether it's cozy, experiential, or luxurious, love always finds the most fitting expression. May you all find the perfect atmosphere for your love story.
The ice hockey schedule for the Milano Cortina 2026 Winter Olympics, featuring preliminary rounds, quarterfinals, and medal matches for both men's and women's tournaments from February 5–22. All game times are listed in Eastern Standard Time (EST).
Choose with the concept of value investing Invest with fixed investment
value investment
determine the approximate value
Valuation indicators
Common valuation indicators
Only applicable to index funds
P/E ratio
PE (Price-to-Earning Ratio) = P (Market Value)/E (Company Earnings)
static price-to-earnings ratio
E takes the net profit of the previous year
rolling price to earnings ratio
E takes the net profit of the last four quarterly financial reports
It has indeed happened, and it has the most reference significance
Dynamic P/E Ratio
E takes the estimated net profit for the next year
reflect information
How much are you willing to pay to obtain 1 yuan of net profit?
Estimated market value: How much money would it theoretically cost to buy the company?
The company's profit is basically stable within one year
Market value fluctuations are caused by large fluctuations in price-to-earnings ratio valuations
bull market
bear market
Applicable varieties
Good liquidity
Can be traded at market price
Investment behavior will not have a feedback effect on market prices
The price-to-earnings ratio of small stocks and high bubble stocks with high price-to-earnings ratios has lost its effect: trading with small funds can lead to sharp rises and plummets.
Stocks selected into indices such as CSI 300 and CSI 500 have good liquidity
Stable profits, not suitable for
Declining industries with “P/E ratio trap”
P/E ratio trap
The price-to-earnings ratio is very low, the industry has entered a downward cycle, and profits continue to decrease.
PE=P/E: E becomes less, PE becomes larger, and is no longer underestimated
cyclical industry
PE=P/E: In the bull market, E becomes larger and PE becomes smaller. It seems to be undervalued.
Once the business cycle is over, the P/E ratio immediately rises
Industries that basically provide homogeneous products and services have relatively obvious cyclicality.
Steel, coal, securities, aviation, shipping...
Industries in the growth stage
Most of the company's profit E is used to invest in expanding its scale and will be artificially adjusted.
Industries in a loss-making period
E is a negative number
Most broad-based index funds have the above two points
Earnings Yield
Profit rate of return = company profit (E) / company market capitalization (P)
Variation of P/E ratio: approximately the reciprocal of P/E ratio
If we buy all of a company, what is the rate of return that the company can bring us in one year?
The higher the earnings yield, the lower the company's market value, the lower the company's valuation, and the more likely it is to be undervalued.
Applicable conditions: Same price-to-earnings ratio (PE)
Good liquidity
Stable profits
price to book ratio
PB (price-to-book ratio) = P (market value)/B (company’s net assets)
The ratio of share price to net assets per share (book value)
Net assets: assets-liabilities, representing the interests shared by all shareholders
Net assets financial indicators are more stable than profits
Measure the company from the perspective of buying assets
Influencing factors
ROE (Return on Equity: The efficiency with which a company operates its assets)
Net profit/net assets
The higher the ROE, the higher the asset operation efficiency, and the higher the PB.
asset value stability
Some assets increase in value over time
Liquor
Some assets depreciate over time
chip
The more stable it is, the higher the effectiveness of the price-to-book ratio
intangible assets
If the company mainly relies on intangible assets to operate, the price-to-book ratio will not have much reference value.
law office
advertising services company
Internet company
…
intangible assets
enterprise brand
Senior technical engineer
Corporate patents, corporate influence, and industry voice
…
Large increase in liabilities/losses
Factors that affect net worth
Applicable conditions
Most corporate assets are tangible assets whose value is easy to measure and are long-term assets that maintain value.
Index funds that are not suitable for highly cyclical industries with price-to-earnings ratios/earnings yields can be used
Special periods of time, such as short-term economic crises, cause corporate profits to be unstable (which will affect the price-to-earnings ratio)
dividend yield
In the past year, the company’s cash dividends/the company’s market capitalization
Differential dividend rate: the company’s cash dividends in the past year/the company’s total net interest rate
Dividend rates are pre-set and remain stable for many years
Dividend yield fluctuates with stock price
The lower the stock price, the lower the market capitalization, and the higher the dividend yield
Dividend rate = profit yield * dividend rate
Dividend rate = dividend/market capitalization
Profit rate of return = profit/market value
Dividend rate = dividend/profit
The dividend rate is relatively stable, so when the earnings yield is high, the dividend rate is also high.
Measuring Cash Dividend Yield
How to obtain index fund valuation indicators
WeChat public account
CSI Index official website
Hang Seng Index official website
financial terminal
WIND
Choice
Buy when price is significantly below value
Price and Value Judgments
profit rate method
Stable profits
Value Stocks: Value Index of Stocks
Fixed investment when the profit rate is high, stop or sell when the profit rate is low
>10%: Invest in batches
6.4<X<10%: Firmly hold
<6.4%: Sell in batches
High profitability standards
>10%
Significantly higher than the risk-free interest rate during the same period
Low profit margin standards
<6.4%
is the long-term average return rate of domestic bond funds
Federal Reserve FED model
Earnings Yield/Ten-Year Treasury Bond Interest Rate
The higher the value, the higher the investment value of the stock market relative to the bond market.
Scope of application
Good liquidity
Profitability is relatively stable
Index funds with fast profit growth or large fluctuations are not suitable.
Category examples
SSE bonus, CSI bonus
SSE 50, Fundamentals 50, SSE 50AH Select, CCTV 50
Hang Seng Index, Hang Seng China Enterprises Index
Borg's formula
Profitable: stable profits and rapid profit growth
Growth Stocks: Growth Index of Stocks
Three key factors that determine long-term stock market returns
Dividend rate at the time of initial investment
Impact on dividend income
Changes in P/E ratio during the investment period
Earnings growth rate during the investment period
PE=P/E----P=PE*E
Impact on capital gains returns
The income formula of the fund index (sum of the three)
Initial investment dividend rate
Confirmed at the time of purchase
determining factors
Annual change in price-to-earnings ratio
When buying, it is determined where the current P/E ratio is within the historical fluctuation range.
determining factors
In the long run, the P/E ratio will change cyclically within a range
Uncertainties: when to change from low to high
annual profit change rate
As long as the country's economy develops in the long term, profits will rise in the long term.
Uncertainty factors: What will be the growth rate of future earnings?
How to apply Borg's formula
Buy when dividend yields are high
Buy when P/E ratios are at all-time lows
often occur simultaneously
After buying, wait patiently for mean reversion (P/E ratio from low to high)
Relationship to the Profitable Income Act
Find funds that meet both criteria
Rising P/E ratios bring gains
Initial dividend yields income
The profit-earning method is a quick judgment version of Borg's formula
Variations of Borg's formula
Net asset value is guaranteed: profits are unstable or change cyclically, but no losses
Cyclical stocks: cyclical index of stocks
Applicable conditions: Net profit E loses reference value
Earnings decline
cyclical changes in earnings
Rapid earnings growth
All profit-related indicators cannot be used as a reference
P/E ratio
Earnings Yield
dividend yield
…
Analyzing Index Funds Using Price-to-Book Ratios
PB=P/B----P=PB*B
Market value = price-to-book ratio * net assets
The future annual compound rate of return of the index fund (sum of the two)
Annual change in price-to-book ratio
Annual change rate of net assets
No more analyzing the initial dividend rate: dividends are part of profits, and it is difficult to pay dividends when profits are unstable
Prerequisites for use
The company’s net asset value is guaranteed
Earnings are unstable, but you won’t lose money even when the business is in trouble
Index funds with stable profits can be used as alternative analysis tools when profits fluctuate in special stages.
Abandon long-term loss-making companies
Distressed Stocks: Distress Index of Stocks
Invest when the price is lower than the value
Investment Strategy
Profit income method fixed investment
Borg's formula fixed investment
Practical steps
Different operating channels
On-exchange channels (trading funds)
Stock trading software
advantage
Transactions are fast, sell on the same day, receive money on the same day, and withdraw money the next day
Low transaction fees
shortcoming
Manual operation, no automatic trading
The number of funds on the market is small and the options are not wide.
OTC channels (subscription and redemption of funds)
Banks, fund companies, Internet fund platforms
advantage
Automatic fixed investment can be set
More variety
shortcoming
The transaction speed is slow (the specific time is different for different funds, please refer to the description)
For non-real-time transactions, after submitting the application, the transaction will be completed after the market closes at 3 p.m. on the trading day. The transaction price will be the net value of the fund after the market closes.
Transaction fees are slightly higher