The profit rate method is very suitable for ordinary investors to use at the beginning. Using the profit rate method to invest can obtain higher returns than ordinary mindless fixed investment. So how to use the profitability method? What is the scope of application of the profitability method? Let's learn together.
盈利收益率的公式为：盈利收益率=公司盈利/公司市值
From the formula, we can see that the profitability is inversely proportional to the company's market value. From the chart above, we can see that when the profitability of our investment is relatively high, it will rise in the following time, and we will get good returns. But if we invest when the profitability is low, We may suffer serious losses.
We observed the historical stock market data of countries around the world and found that most index funds have the following characteristics:
When the profitability is high, the final return will be very good;
When the profitability is low, the final return will be very ordinary.
Then the fixed investment strategy of the profitability method is: Start making fixed investments when the profitability is high, and stop making fixed investments or even selling when the profitability is low, so as to ensure that you can make money.
So the question is, how high is the profitability? How low is low? Graham believes that high profitability should meet two characteristics:
1. The profitability should be greater than 10%;
2. The profitability is more than twice higher than the risk-free interest rate in the same period.
To summarize briefly:
