Looking back at 2022, the Nasdaq 100 Index has accumulated a decline of over 30%, a drop that is very rare in the history of U.S. stocks, second only to the Nasdaq's performance during the Internet bubble from 2000 to 2002 and the financial crisis from 2007 to 2009.

With the rapid shrinkage of valuations, the investment cost-performance ratio of the Nasdaq 100 Index has become increasingly attractive. The current trailing price-to-earnings (P/E) ratio of the Nasdaq 100 is at 29.89, with a percentile point of 48.81%, which is below the median. Whether viewed from the perspective of P/E or price-to-sales (P/S) ratio, the current valuation of the index is at a relatively low range compared to the past three years.

Opportunities in the stock market are always "fallen out". In the view of Huanan Fund Manager Ni Bin, "The indices of developed countries, such as Germany, France, Japan, the United States, and so on, have a high degree of marketization, all have corresponding derivative products, and have relatively excellent long-term historical performance. Their correlation with the domestic stock market is also relatively low, making them very suitable for investors to diversify their portfolios."

Firstly, let's consider why investment gurus are optimistic about the Nasdaq 100. As the main index of the Nasdaq, the Nasdaq 100 Index's 100 constituent stocks all have the characteristics of high technology, high growth, and non-financial, making it a representative of the beautiful country's technology stock index and the stronghold of high-tech, high-growth enterprises.

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On the one hand, despite significant adjustments in 2022, looking at the long term, the Nasdaq 100 has shown a strong money-making effect over the past decade. The index's increase over ten years reached 319.73%, with an annualized return of 15.30%. In comparison, the CSI 300 Index's increase was only 56.11%, with an annualized return of just 4.69%, and its volatility was greater than that of U.S. stocks.

On the other hand, the Fed's slowdown in interest rate hikes is a positive factor for technology stocks. On December 1st last year, Federal Reserve Chairman Powell indicated that a moderation in the pace of interest rate hikes could come after the December meeting. After Powell's speech, investment sentiment boiled, and the Fed's slowdown in interest rate hikes became a market consensus, which is an improvement in sentiment for U.S. stocks.

Based on 2023, against the backdrop of the Fed's "hawkish" stance softening, market trading liquidity is expected to ease again, and the technology growth sector, which is more sensitive to liquidity, is expected to benefit the most.More radically, some argue that the economy of the Beautiful Country may experience a recession in 2023, subsequently entering a rate-cutting cycle in the second half of the year, which would also be beneficial for the valuation lift of the technology growth sector.

In addition to this, diversification and globalization of asset allocation are effective ways to cope with market volatility risks.

Ni Bin candidly stated, "Due to a preference for their own country and familiar markets, many investors have very limited knowledge of overseas markets. The current allocation ratio of foreign ETFs is significantly low, and the work related to investor education still has a long way to go. For investors, investing in different global markets is of great significance for diversifying the risks of a single domestic market portfolio, including reducing exchange rate risks."

Secondly, index funds that track the Nasdaq 100 have different performance records.

Index funds aim to track the index and control the tracking error between the fund's performance and the index returns. However, funds that track the same index may also show performance differences due to various factors.

Taking the Nasdaq 100 index fund as an example:

On one hand, the exchange rate between the Chinese yuan and the US dollar will affect the fund's returns. The performance of the Nasdaq 100 index fund over a period will be the combination of the fluctuations in the US stock market and the changes in the exchange rate between the US dollar and the Chinese yuan.

On the other hand, different products have different management fee rates. When choosing an index fund, it is essential to pay attention to the management fees and other fee rates. There is no reason not to choose a fund company with lower fees, right?

Therefore, we should opt for products from fund companies that have strong counter-trading capabilities, strong investment research strength, and low fee rates.

Lastly, although the US stock market is attractive, short-term risks should not be overlooked. Friends with strong risk resistance and who are aiming for high returns can pay attention to the Nasdaq 100 index!