What is a Variable Ratio Write?

The variable ratio method ^[1], also known as the "change ratio method", "change ratio method", and "constant value ratio fixed-term plan", refers to a type of investment portfolio used by investors that changes as the stock price changes Investment Strategy. It is based on a stock's expected price trend line. Investors can determine the purchase and sale of stocks based on the changes in stock prices in the expected price trend, so that the proportion of the investment portfolio changes. When the stock price is higher than the expected price, sell the stock to buy the bond; otherwise, buy the stock and sell the bond accordingly.

Variable ratio method

Variable ratio method ^[1]

Generally speaking, when the stock's expected price trend is bullish,

Non-standard type

For example, an investor has cash of 1,000 yuan and invests according to the "variable ratio method". Initially, stocks and bonds each accounted for 50%, that is, 500 yuan was invested in stocks, 10 shares of 50 yuan per share were purchased, and 500 yuan was invested in bonds. If the expected price trend of the stock is bullish, and each share is expected to rise by 5 yuan per month. Investors buy or sell stocks based on the difference between the stock price and the expected price, and buy and sell bonds accordingly. Then, when the stock price is consistent with the expected price (that is, a monthly increase of 5 yuan), the proportion of the risky part of the portfolio will rise from 50% to 52.4% in the second month (the stock amount is 550 yuan and the bond amount 500 yuan), rose from 52.4% to 54.5% in the third month.

When the stock price is lower than the expected price or higher than the expected price, you can buy or sell the stock according to the distribution percentage of the actual spread, which will also increase the proportion of the risky part of the investment portfolio from month to month. For example, the stock price rose to 61 yuan per share, which is 6 yuan higher than the expected price of 55 yuan per share. These 6 yuan is the actual difference between the stock price and the expected price. If the actual percentage distribution of the difference is still 50% each, then the investor will withdraw 3 yuan (ie 6 × 50% = 3) from each share, throw out the stock with a total value of 30 yuan, and buy With the same amount of bonds, his investment portfolio is 580 yuan in stocks and 530 yuan in bonds, with the risky part accounting for 52.25% and the protective part accounting for 47.75%. The distribution percentage of the actual spread can be determined according to the needs of investors and specific circumstances. If the stock's expected price trend line is bearish, the opposite is true and the proportion of the risk component in the portfolio will gradually decrease.

Therefore, anticipating price movements when using the variable ratio method is critical. Its direction and amplitude directly determine the proportion of the two parts of the investment portfolio, as well as the fluctuation range of the proportion.