Do you know how to "raise chickens"?

(Disclaimer: The funds and apps mentioned in the article do not contain any promotion, they are purely for content use)

In "How should you deal with the uneven distribution of social wealth," I demonstrated the steps of how to change the money fund entity in Yu'e Bao to everyone. Those who are interested can try it out, there is no promotion, it's just a familiar example to everyone.

At the same time, I also introduced the basic knowledge of funds in detail.

Buffett's investment teacher, Graham, proposed a method in "The Intelligent Investor": the dollar cost averaging method, also known as the fixed amount strategy.Do you still remember the method of this strategy? It is the fixed investment in funds.

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However, we have understood that fixed investment is not without risks, and it also requires us to have certain investment strategies and methods.

The following will introduce in detail the actual operation strategy of fixed investment in funds, hoping to help you have a more comprehensive understanding of fixed investment in funds, and even double the returns.

The actual operation of fixed investment in funds generally includes five steps:

Determine the type of index

Determine the index to invest in

Choose the fund company

BuySell Out

Determine the Type of Index

Index funds are mainly divided into two major categories:

Broad-based index funds: Refer to funds that invest in companies across multiple industries, covering a wide range of industries.

These types of funds cover a broad range of industries, so they offer the best in safety and stability. The risk is relatively low, making them suitable for new investors.

For example, the CSI 300, SSE 50, and CSI 500 all belong to broad-based indices.Industry Index Funds: These refer to funds that invest in companies within the same industry, covering only a specific industry's scope.

Compared to broad-based index funds, the risk and returns are often higher, and it is not recommended for new investors to start with these directly.

For example, pharmaceutical indices and consumer indices are both considered industry index funds.

After we have chosen the type of index we want to invest in, we need to proceed to the second step.

Determine the index to invest in.Here, we can open WeChat and search for the "Qie Man" mini-program.

Then, we can view the real-time index valuation table within this mini-program:

Green represents that part of the index, which is currently undervalued and more suitable for fixed investment;

Yellow represents that part of the index, which is currently moderately valued and can be observed;

Red represents that part of the index, which is currently overvalued and requires caution.

We can select an index from the green section and choose to invest fixedly.Similar valuation tables can also be seen on many platforms, such as apps like DanJuan and TianTian Fund.

Everyone is familiar with the red and green light function on the fund page in Alipay, which can also be used to look at valuations.

These valuations are calculated based on different indicators of each index (P/E, D/P, E/P).

For newcomers, these valuation indicators are a bit troublesome to understand, so the method taught here to look at the valuation table is the simplest method.

Take the Shanghai Stock Exchange 50 as an example (only for demonstration, not for recommendation) to determine the third step.It must be understood that this is already a high valuation and is not recommended as an investment.

Selecting a Fund Company

Once we have chosen the index, the next step is to select a specific fund.

Let's use the familiar Alipay as an example to demonstrate this process:

1. On the homepage of Alipay, click on "Wealth Management" at the bottom.2. Click on "Funds"

3. Search for "SSE 50"

At this point, you will find that there are many funds related to the SSE 50.

So, how should we choose?

Mainly based on 2 important criteria to judge:

1. The establishment period should not be too short, it is recommended to be more than 3 years!2. The scale should not be too small, it is recommended to be greater than 200 million!

If a fund is established for a very short time, or if the scale of the funds is very small, then there is a risk that the fund may be liquidated.

Liquidation is not as terrible as everyone thinks, it actually just means that the fund has been dissolved, and the money you invested will still be returned to you by the fund company.

So when we choose a fund, we should still try to avoid this, otherwise, fixed investment is in vain.

Based on the above two points,

How should we specifically operate?There is a tool, an international investment information website, where we can filter funds within it.

Note: The following data are only for demonstration purposes and are not specific fund investment recommendations!

1. Open Baidu search for "Morningstar":

2. Enter the homepage of the website, and you can see "Fund Tools" in the menu bar. When the mouse hovers over it, you can see there is a "Fund Filter":

3. Enter the homepage of the Fund Filter, enter "Shanghai 50" below, and check the three-year rating "Three Stars and above", "Open-ended", and "Common Stock Type" above:

4. Click "Search" in the lower right corner, and now we can see the filtered funds:The ratings of these funds are relatively high, and they will basically meet our standards. It can be seen that there are 14 funds that meet the criteria in the screening results.

5. We can just click on the first few, such as the first one, "Yifangda SSE 50 Index Enhanced A":

You can see the establishment time and net assets of this fund. Further down, you can also see more information, such as the fund's fee rate, historical data, and so on.

At the beginning, everyone may not be able to understand it, but it doesn't matter. The main thing is to meet the two indicators we just talked about.

Buy6. Return to the Alipay Fund page, search for the fund code "110003", find this fund "Yifangda SSE 50 Index Enhanced A", and click on the "Regular Investment" option below:

7. Then you can set the "Investment Amount" and "Investment Cycle". Once set, it will automatically execute your regular investment strategy to deduct funds and purchase shares:

8. To view the returns, you can check in the "Holding" section at the bottom of the fund page, and you can also select "My Regular Investments" on this page to manage and modify your regular investment strategy:

This concludes the entire process of selecting a fund and making regular investments.

If you are relatively lazy, there is no need to monitor the market daily. As long as we have made the right choices in the initial fund selection process, all we need to do afterwards is to persist in regular investing.Although the returns from regular investment are quite good, we also need to be prepared for long-term investment.

After we have been investing regularly for a period of time, such as 1-2 years, when the market rises and the return rate reaches our expectation, we should consider selling.

Selling

As mentioned in previous articles, the bull market cycle in A-shares is often very short. If we do not sell during the bull market, it will actually fall afterwards.

Then we have to wait for a long time to meet the next selling opportunity, thus wasting a lot of time and returns.Setting a profit target is also a very important matter.

For experienced investors, they often judge the timing of selling based on the trend of the overall market, as well as various valuation indicators.

For newcomers, this can often be more complex, so the simplest method can be used here, which is to decide the timing of selling according to one's own psychological expectations.

The inflation rate of 7% introduced in the previous article can be used as a reference for measurement.

Newcomers, for example, if your target return rate is an average annualized 15%, then when you have been investing for 1 year and the fund's return rate has increased to 15%; or if it has increased to 30% after 2 years, you can consider selling.Of course, this is not the best method, but for newcomers, it is the simplest method.

So far, we have introduced the basic steps and precautions for the practical operation of investing in index funds.

But I don't suggest that you invest in index funds immediately, because what we talked about today is only a small part of fund investment, just to bring everyone a slightly familiar structure.

Investment returns still require us to continue to delve deeper into learning and understanding, and what this will bring us is a lifelong benefit!