We divide all our available funds into several portions and buy continuously with a fixed investment approach, instead of making a one-time, all-in purchase.
Our third core principle is this:
We only buy at the right time, and then sell at the right time.
So, the question we now need to address becomes: When is the right time to buy and sell?
It's simple: there's an indicator called the 'Equity Risk Premium Index'.
Under normal circumstances, when we evaluate the market, we use an indicator called the price-to-earnings ratio, which anyone with a bit of financial knowledge should understand.
The price-to-earnings ratio is calculated by dividing the current stock price by earnings per share.
If reversed, it becomes the earnings yield, that is: earnings per share / current price = a percentage.
Mathematically speaking, it represents the maximum rights and dividends the listed company can offer you.
