CPPI strategy is to build a portfolio through fixed proportions. As a strategy with a fixed investment period, if you insist on holding it until the end, the principal will not be lost, which is equivalent to buying insurance to avoid losses from falling prices. . This strategy involves two types of assets - risky assets (stock funds) and safe assets (fixed income funds). A reasonable allocation ratio is calculated based on a specific formula for investment.

The investment steps of the CPPI investment strategy can be roughly divided into three steps:

1. Set the current capital preservation amount that should be held based on the minimum target value at the end of the investment portfolio and a reasonable discount rate The number of assets is the value bottom line of the investment portfolio;

2. Calculate the amount by which the current net value of the investment portfolio exceeds the value bottom line, and this value is equal to the safety cushion;

3. The amount is equivalent to the safety cushion A specific multiple of the fund size is invested in income-earning assets (such as stocks) to create income above the minimum target value, and the remaining assets are invested in capital-preserving assets to achieve the minimum target value at the end of the period. Invest in income-producing assets (such as stocks) to generate income above the minimum target value, and the remaining assets are invested in capital-preserving assets to achieve the minimum target value at the end of the period.

There are three main points in investing according to CPPI: determination of capital guarantee; determination of magnification; and maintenance of safety margin magnification.

In a bull market, since capital preservation funds need to ensure a large proportion of bond investments, their growth rates lag behind. But in a bear market, CPPI’s investment strategy highlights its advantages. Under the volatile market conditions, the need to preserve principal has always been present throughout the fund's investment process, allowing the fund's assets to increase in value steadily.

Investment strategy is the arrangement and preparation of investment assets according to different needs and risk tolerance. This includes selecting stocks, bonds, commodity futures and real estate types, formulating investment asset ratios, arranging investment cycles, etc. Investment diversification is to selectively invest funds in a variety of securities in an effort to reduce future uncertainty, that is, to strive to obtain more investment returns with less investment risk. This is the goal of securities investors. Basic considerations in formulating an investment diversification strategy.