Let's talk about several common investment methods.

When many people discuss investing, the easiest thing to argue about is:

"Your method doesn't work; my method is the right one."

But I increasingly feel that making money in the stock market isn't limited to just one way.

Many arguments are not essentially about who is right or wrong, but rather that people are making money using different methods.

Today, let's talk about several common investment approaches.

1) Making money from market volatility: Buy broad-based index ETFs during major declines, reduce positions during rebounds

This approach is most suitable for the majority of people.

Go about your daily life normally, live well, patiently wait for the market to show clear panic and significant declines, then buy broad-based index ETFs in batches.

When market sentiment recovers and valuations return to relatively high levels, reduce positions in batches.

The core of this method is not "predicting tops and bottoms," but rather:

Buy more when odds are favorable, do less when odds are average.

Note: Don't let "waiting for a major decline" turn into being permanently in cash; also, don't sell everything as soon as the market rises.

2) Making money from individual stock volatility: Focus on a few good stocks, trade in waves to lower costs

Keep an eye on one or two individual stocks you are sufficiently familiar with and that truly have value.

Buy a little when it falls a lot, reduce a little when it rises a lot, trade in waves back and forth, gradually lowering your holding costs.

The advantage of this method is high efficiency, but the prerequisite is that you understand the target well enough.

If you try to do everything and know a little about everything, you're more likely to get confused.

Note: It's best to separate your core positions from your trading positions, otherwise it's easy to gradually lose your long-term holdings while trading.

3) Making money from cash flow: Hold high-yield assets, collect dividends

This approach isn't exciting, but it's very practical.

Hold high-yield assets, relying on dividends to provide cash flow.

During market panics or when risk-off sentiment heats up, these assets can sometimes deliver a wave of relative returns.

But also note: A high dividend yield doesn't equal a good asset; some "high yields" are actually the result of price declines. Also, don't chase defensive stocks at high prices.

4) Making money from cycle misalignment: Deploy capital in out-of-favor sectors against the cycle

The market will always periodically favor hot sectors and periodically shun cold ones.

The real opportunity often comes when out-of-favor sectors are neglected and undervalued.

For example, previously undervalued banking sectors, or certain industries currently in a low point of their business cycle but with potential for future recovery, like some areas in memory/storage, essentially fall into this category.

This method heavily tests contrarian thinking and patience, because it often involves "buying and then not seeing a rise, and having to endure a period of grinding first."

Note: Out-of-favor doesn't necessarily mean cheap, and cheap doesn't guarantee a reversal. Distinguish clearly between a "cycle low" and a situation where the "underlying logic is already broken."

5) Making money from valuation recovery: Wait for industry leaders to go on sale, then build a heavy position in batches

This is one of the most classic paths in value investing.

The core logic is simple:

Good companies in good sectors are often not cheap under normal circumstances; only during market panics, when the sector faces short-term pressure, and when sentiment is excessively pessimistic, do meaningful discounts appear.

Buying in batches at this time aims to profit from future valuation recovery and fundamental improvement.

But note: "Leaders on sale" does not equal "blindly going all in."

Even for the best companies, you must buy in batches, verify, and leave room for error.

6) Making money from corporate growth: Invest in growth stocks, benefit from compounding

This approach has the highest potential ceiling and also tests knowledge and temperament the most.

You are buying a company's ability to grow consistently over the next few years, profiting from the earnings and valuation expansion released by that growth.

Once you are right and hold on, the power of compounding can be astonishing.

But growth stocks also tend to have the highest volatility. Many people don't get it wrong; they just can't hold on: fearing pullbacks when prices rise, fearing crashes when prices fall.

I think no single method is effective forever.

They are more like different strategies suited to different market environments:

Sometimes it's suitable to trade index volatility

Sometimes it's suitable to trade individual stock waves

Sometimes it's suitable to wait for leaders to go on sale

Sometimes it's best to move less, collect dividends, hold cash, and wait for opportunities

What's truly important isn't knowing every method, but knowing which investment approach suits you.