1) Investors' risk tolerance.

This factor is very important and can be subdivided into subjective risk tolerance and objective risk tolerance. In short, it is how much money you have and how much money you can lose.

2) Investment objectives set by investors.

For example, your investment goal determines that you need aggressive investment methods, such as buying small-cap growth funds to get high returns, but at the same time you can't afford to lose 20% in a quarter. At this time, you must accept a greater level of risk or adjust your investment objectives.

3) Investment period.

If the investment goal is to retire after 20 years, it can bear large income fluctuations, because the longer the term, the more obvious the risk smoothing effect of the capital market. Even if there is a short-term loss, there is still time to wait for the net value to rise. If you are not far from the investment goal, you should pay attention to the income you have already obtained and don't take risks to earn more income.

4) Market factors.

We put it last because we believe that investment is a long-term process and should not care too much about short-term market factors. But investment is also a flexible thing, and the portfolio can still be adjusted according to market factors.

5) Determine your own investment style.

That is, active investors, conservative investors or cautious investors, which will directly affect the future asset allocation. Can be considered according to the above four points.

6) Under this framework, the core combination will be determined.

For each investment goal, choose 3~4 funds with stable performance to form the core portfolio, which is the main factor that determines the long-term performance of the whole fund portfolio. A simple model that can be used for reference is to concentrate on investing in a few funds that can achieve your investment goals, and then gradually increase the investment amount instead of increasing the number of funds in the core portfolio.