Many people think that if we start to invest, we need to learn complex mathematical knowledge and financial theories of investment.

In fact, you don't need to know these things to get good investment returns. Just like learning to drive a car, as long as we learn the traffic rules and driving skills, we can take ourselves from place A to place B safely.

There is a simple formula: good assets+good price+long-term holding, which helps you judge what a good investment is.

The first question many people are curious about is: Which one should I buy?

Now, we can often see those good stocks. For example, the purchase of Tesla in 2019 has increased more than 20 times in three years (2022).

Indeed, Buffett has earned lots of money with this ability. But the reason that Buffett is famous is his achievements are hard to reach.

For most investors, it is difficult to distinguish these good companies many years ago. Now many companies have grown into good companies, but their prices are generally not cheap. Even if we were lucky and selected them in that time, when its business suffered setbacks, we did not have the confidence to hold the falling stocks.

Choosing a good company is a seemingly bright but actually tough road.

As ordinary investors, we do not expect to become rich through investment. What we need is make our hard-earned money obtain reasonable benefits.

Compared with pursuing high returns blindly, if we can hold them for a long time in the uncertain investment market, they are really good assets. It should have the following characteristics:

1. It does not cost us too much energy and time;
2. Invest in reliable assets that have a reliable source of return. Unlike P2P, which makes investors lose all money;
3. Although it may fluctuate in the short term, we can hold it for a long time and it will probably be profitable.

In fact, this kind of asset has existed for a long time and is gradually known by people -- it is the broad based index in index funds.

Index fund refers to the fund that purchases a basket of stocks. By purchasing index fund, we can buy stocks of multiple companies with little money.

The broad based index is a part of index fund that covers many major industries of the national economy.

Broad based index is a good asset for ordinary investors. It is decentralized enough and it won’t lose all money because of the problems of individual companies. At the same time, we put those excellent companies into our investment through the rule of survival of the fittest.

More importantly, the industry is changeable and companies have ups and downs. The broad based index can represent the overall economy of a country, which is like a ship riding the wind and waves, helping us enjoy the dividends brought by the national economic growth.

After buying assets at a good price, what we need to do is to hold them patiently for a long time.

We don't know when the market will increase greatly. What we can do is to stay in the market and ensure that we are there when it comes.

（Writer：Juliy）