Group 1 - The main sources of returns for index funds are profit growth, valuation improvement, and dividend income [2] - Profit growth from listed companies is the core source of long-term returns, while valuation impacts returns significantly during market cycles [2] - Dividend contributions are substantial for dividend and value indices, and patience in holding these investments is advised as long as they are not overvalued [2]

Core Viewpoint - The article emphasizes that not all stocks reach overvaluation during a bull market, and some may remain undervalued even in rising markets. It highlights the importance of patience and understanding that long-term returns are primarily driven by corporate earnings growth rather than just valuation changes [1][16]. Group 1: Market Dynamics - In bull markets, there are often structural characteristics where only certain stocks rise significantly while others may remain stagnant or even decline [3][4]. - Historical examples show that different market phases favor different stock categories, such as large-cap value stocks or small-cap growth stocks, indicating that patience is required for currently underperforming stocks to potentially lead in future bull markets [7][16]. Group 2: Earnings Growth vs. Valuation - The article outlines that valuation increases are just one form of return; the core source of long-term returns comes from the growth in corporate earnings [9][10]. - It provides a formula for understanding index fund returns: Index Fund Net Value = Valuation * Earnings + Dividends, indicating that while valuation may fluctuate, earnings growth is a more stable driver of long-term performance [9][10]. Group 3: Historical Performance - Using the example of the A-share market, it notes that the index levels at which five-star ratings occur have increased over time, reflecting the underlying growth in corporate earnings rather than reliance on high valuations [12][13]. - The article states that even in bear markets, the index can rise due to earnings growth, demonstrating that long-term investment success is based on fundamental performance rather than market timing [15][16]. Group 4: Investment Strategy - The article concludes that a combination of good stocks, good prices, and long-term holding strategies leads to favorable returns, reinforcing the idea that patience and a focus on earnings growth are essential for successful investing [17].