The first six articles laid out the shelves, the rules, and the fees. This final one answers the original question: with so many instruments, how do I actually start?
Bucket your money by time horizon first, don’t pick instruments by return
A beginner’s first instinct when choosing instruments is to compare yields — that’s the wrong order. The correct first step is to divide your money into four buckets by when you’ll need it. The horizon determines how much risk you can bear:
- The spending bucket (needed at any time): money market funds, bank T+0 wealth-management products. Returns just above 1%, but withdrawable anytime. Keep 3–6 months of living expenses here.
- The short-term bucket (needed within 1–3 years): savings treasury bonds, pure bond funds, government bond reverse repo, fixed-income wealth-management products. The goal is to beat deposits while basically not losing money.
- The long-term bucket (untouched for 5+ years): this is the admission ticket for equity assets — broad-based index ETFs, a small amount of convertible bonds, REITs. A-share bull and bear cycles are measured in years; if the money isn’t long enough, you’ll be forced to sell at the worst moment.
- The locked bucket (used only in retirement): the ¥12,000/year private pension account allowance — fill it first if your marginal tax rate is above 10%.
The most common loss script — “buying stocks with money needed a year later, getting trapped at the lows, and being forced to cut losses” — is fundamentally not a selection error but a bucketing error. Get the horizon matching right, and a slightly wrong instrument choice only means earning a bit less, not breaking bones.
A reference structure for the long-term bucket
For the long-term bucket, here’s a purely illustrative structure (not investment advice — just showing how the shelves fit together):
- Core 60%–80%: broad-based index ETFs (CSI 300 / CSI A500 / dividend-type), bought through regular fixed-amount investing or in phases, held for the long term.
- Satellites 20%–40%: convertible bonds (the double-low approach), sector/theme ETFs, REITs, gold — allocated by your own research and interests, with no single satellite exceeding 10%–15% of the long-term money.
The core earns the market’s money; the satellites earn your insight’s money. If every satellite dies, the core is still there — the point of the structure is to let you dare to keep satellites small while staying in the market to learn.
Ten pitfalls, sidestepped one by one
- Chasing limit-ups and acting on tips: any news you can hear is already priced in. In the theme-stock game, retail investors are the liquidity providers.
- Treating bond funds as deposits: bond funds do fall — in the November 2022 redemption wave, even short-term bond funds had consecutive drawdowns. Check the contract for whether it can invest in convertible bonds and stocks.
- Buying QDII at high premiums: a cross-border ETF/QDII trading at a 5%+ on-exchange premium means a near-certain loss when the premium converges. Glance at the IOPV/NAV before buying.
- Ignoring forced redemption on high-priced convertible bonds: above ¥150 there is no “floor below,” and a forced-redemption announcement cuts the price off at the ankles. If you hold convertible bonds, you must watch the announcements.
- Chasing REITs at high premiums: buying an asset with an 8% distribution yield at a 40% premium means handing five years of dividends to the seller in advance.
- Frequent trading: Part 6 did the math — turning over ten times a year costs about 1% in friction, while most people’s market-timing contribution is negative.
- Buying funds off the championship list: last year’s champion fund is ground zero for mean reversion. Choose an index, or a manager whose logic you can articulate.
- Treating gold jewelry as an investment: craftsmanship fees and brand premiums go to zero at resale. Investment bars and gold ETFs are gold.
- Touching “wealth-management products” you don’t understand: a fixed-income product yielding noticeably more than its peers is pricing in risk with the excess. Since the new asset-management rules, there are no guaranteed-return wealth-management products (except deposits).
- Leverage: margin financing, off-exchange leveraged funding, borrowing to invest. Leverage doesn’t create returns — it amplifies volatility, and volatility destroys discipline.
The minimal action list
If, after finishing the series, you want to do something this week, follow this order:
- Open a brokerage account (ID card + bank card, ten minutes), and while you’re at it, negotiate the commission down to 0.01%–0.015% including regulatory fees.
- Complete your first trade — one lot of the cheapest ETF or a low-priced stock — so your “24 months of trading experience” starts counting from tomorrow.
- Move your spending bucket into a money market fund or reverse repo, and build the habit of never letting idle cash lie around.
- Write a one-page plan for the long-term bucket: what to buy, in what proportions, and what to do if it falls by how much. The act of writing it down matters more than the plan’s contents.
- If your marginal tax rate is above 10%, go to a bank and open a private pension account.
At this point, the question “what can you buy in mainland China” is fully answered. But knowing the shelves is only the starting point — the same ETFs and convertible bonds, bought and sold with or without rule-based methods, produce wildly different long-term outcomes. The next series in this site’s quant section, A-Share Quant in Practice: From Data to Live Trading (placeholder already reserved), picks up right here: free data, backtesting, ETF rotation, the convertible-bond double-low strategy, grid trading, and a survival guide for strategies under T+1 and price-limit constraints.
The entire series is a knowledge summary and does not constitute investment advice. Market rules keep evolving — refer to the latest information from exchanges, regulators, and product announcements.