Core Insights - The article emphasizes the growing interest in ETF investments among ordinary people and provides guidance on how to navigate this investment vehicle for stable wealth growth [1] Group 1: Selection Principles for ETFs - Understanding the investment scope of a fund is crucial, as different bond funds have varying risk profiles, with 37% of mixed funds experiencing significant net value fluctuations due to heavy AI sector investments in 2025 [1] - Long-term performance (3-5 years) should be prioritized over short-term gains, as evidenced by a chip ETF that surged 50% in one month but later fell back [1] - The experience of fund managers is vital, with those managing the same fund for over 10 years outperforming their frequently changing counterparts by 23% [1] Group 2: Four-Dimensional Screening Method for ETFs - Liquidity is essential for ETFs; products with a scale over 500 million and daily trading volume exceeding 10 million are recommended for better liquidity [2] - Tracking error is a key performance indicator, with larger ETFs (over 5 billion) averaging a tracking error of only 0.03%, while smaller ones can reach 0.5% [2] - Valuation opportunities exist, with the current PE ratio of the CSI 300 at historical lows, but not all low-valuation sectors are worth investing in [2] - Fee rates significantly impact returns, with a difference in management fees of 0.15% versus 0.5% potentially leading to a 28% difference in returns over 10 years [2] Group 3: Common Misconceptions in ETF Investment - Many investors mistakenly treat ETFs as short-term trading tools, while their core advantage lies in risk diversification and long-term holding [3] - The belief that buying more ETFs leads to better risk diversification is flawed, as many ETFs may have overlapping top holdings [3] - Cost considerations extend beyond management fees to include trading commissions and internal costs from index adjustments, which can erode investment returns [3] Group 4: Evaluating ETF Value - The assessment of whether an ETF is "cheap" should be based on valuation, fundamentals, and tracking accuracy rather than just its low price [4] Group 5: Practical Investment Strategies - The core-satellite allocation strategy suggests investing 70% in broad-based ETFs for stable returns and 30% in sector-specific ETFs for growth opportunities [5] - The volatility market income strategy involves setting grid levels for buying and selling ETFs based on price fluctuations, allowing for profit accumulation during market volatility [5] - Patience and a clear mindset are essential for successful investing, echoing the sentiment that investment is akin to rolling a snowball, requiring the right conditions for growth [5]