Method 1: Balance the market value from the perspective of market value.
The stock market can be divided into large-cap stocks, small-cap stocks and medium-cap stocks according to different market values. What we have to do is try to match them in different market values.
A typical feature of domestic stock market is the rotation of large and small markets, that is, there is often a bull market with a big market and a small market. Only by balancing the market value of large and small markets can we better grasp the market and not easily miss the bull market.
In the fund market, stocks with different market values can be allocated through different investment styles. For example, funds with value investment style generally invest in large-cap blue-chip stocks, while funds with growth investment style generally invest in small and medium-sized growth stocks.
It can also be allocated through different broad-based index funds. For example, the funds that track the SSE 50 Index are blue-chip stocks with large investment market value, while the SSE 500 Index favors small and medium-sized stocks.
Mode 2: Balanced allocation of periodic industries
Different industries will have their own periodicity, some strong and some weak.
Some industries are greatly affected by the economic cycle, so it is impossible to make money steadily all the time, and profits and stock prices will change periodically. We call it strong cycle industries, such as real estate, steel and chemical industry.
The profits of some industries are basically unaffected by the economic cycle and relatively stable. We call it weak cycle industries, such as medicine and consumer industries.
Industries with strong periodicity will perform very well in the market in the near future, and it is easy to obtain market excess returns. Reconfigure some industries with weak periodicity to ensure the risk balance of market fluctuation during economic recession.
For example, you can choose a combination of medical theme+financial real estate theme+bond fund+money fund.
This balanced allocation is more suitable for senior novice investors who have certain analytical ability on market environment, industry characteristics and policy support.