Of course, the glory of 29 does not mean that all people will receive the same income if they invest in any category of the capital market. For example, the Morningstar China stock fund index rose by 7.72% last year, while the Morningstar bond fund index earned 4.99%. And the annual income is uneven, it is difficult to lock an expected value. We should also realize that it is impossible to include all listed funds or stocks in the compilation of an index. In addition, there are often other investment categories in a personal portfolio, such as money market funds, time deposits, or commodity futures. It is precisely because of the above reasons that investors should not compare the performance of individual investment with the performance of index alone.
the volatility of the market is very unpredictable for individual investors, especially when there is not enough information to judge. Investors may wish to refer to the following investment experience. These principles have their operational value whether in a bear market or a bull market.
Revelation 1: Make clear the investment goal and choose the investment period
Many people spend too much time thinking about which fund to hold or how to make money, but spend too little time thinking about other aspects of investment, such as investment goals and overall asset allocation. Generally speaking, investment goals will determine the investment portfolio and time range. Everyone has their own unique financial indicators, such as the cost of children's higher education, owning their own house, or providing money for retirement. If you need money in two years or less, you can consider investing in money market funds or time deposits. If you can wait two to three years, you can choose to invest in short-term debt funds or ultra-short-term debt funds. Other kinds of investment will increase your investment risk. On the other hand, if you are a younger investor and are preparing for future retirement, you can concentrate all your investments on stocks. But if your investment goal is short-and medium-term, it is not so certain whether the return from investing in stocks will be better than that from investing in bonds. Of course, you must also face up to the fact that your investment choices may always lag behind other categories. The first lesson for individual investors is to understand their investment goals and their risk tolerance, and then choose the types of investment according to the above judgments.
Revelation 2: Average cost investment method
Although funds have long-term investment characteristics, and the volatility is not as severe as that of stocks, this does not mean that once a fund is selected, it can be done once and for all, and the unique volatility of the capital market cannot be completely avoided by choosing a single fund or stock. There is a way to reduce the risks brought by volatility. For example, if you invest in your pension through your employer's enterprise annuity plan, you may have been invested in the securities market every time you get your payroll. In terms of financial management, this practice of regular investment is called the average cost investment method. This approach allows investors to avoid over-investment during the market boom (because the price of funds or stocks rises, you can only buy a small share at a time), but can invest more when the market is in a downturn (when the fund or stock price falls, you can buy more shares at a time).
Revelation 3: Save more (not just for now)
In the process before the financial crisis, the savings of China consumers, especially young people, gradually decreased. China's increasingly loose monetary policy makes it relatively easy to lend and borrow, which leads to the phenomenon that people can't afford to buy a lifestyle by credit card overdraft, and the mortgage exceeds their personal income tolerance. If market fluctuation leads to no growth in personal investment, then the only way to make up for the gap in life is to save more. This brings us back to the pension account mentioned earlier. Since the reform of enterprise annuity policy in 24, more and more enterprises, including foreign companies in China, have participated in this win-win investment model for enterprises and employees. The current policy allows each enterprise to contribute 1/12 of your previous year's income to your pension account every year, and if you add up with your personal contribution, you can invest up to 1/6 of your previous year's income. For example, if your income in 29 is 6, yuan, then your pension account can be increased by 1, yuan a year. According to the conservative assumption, if the annual return of your pension account is only 4%, you should have at least 58, yuan in your account when you can start to withdraw your pension after 3 years. Be sure to remember that you have invested enough to make the best use of this preferential policy.
Revelation 4: Minimize investment costs and taxes
In the first five years of this century, many investors didn't care too much about costs, and the government didn't have much enthusiasm for using taxes to intervene in the market. Because when the stock market rises by more than 2% every year, the 5% transaction fee becomes irrelevant. But in today's market, where the rate of return is only 4% or less, if you are lucky, even a 1% fee will take up 25% of the return. In March 21, the "Regulations on the Management of Sales Expenses of Open-end Securities Investment Funds" will be implemented. The CSRC has made it clear that fund management companies can charge subscription fees of up to 5%. In addition, in order to encourage and guide investors to use funds as a tool for long-term investment, a ladder-shaped redemption fee standard has been set up (specifically, investors who hold funds for less than 7 days are charged a redemption fee of not less than 1.5%; For less than 3 days, no less than .75% will be charged; There is no charge for holding it for more than 3 years). These expenses add up to six or seven percentage points of the total assets, ranging from 1% to 2%.
from the perspective of taxation, China has a very generous preferential policy for individual investment funds. For example, individual investors are exempt from stamp duty when buying and selling funds, and individual income tax is not levied on the difference income of individual investors' investment fund shares for the time being. Comparatively speaking, interest tax must be paid for bank interest, stamp duty and dividend must be paid for stock and bond investment, and interest income tax is not as favorable as fund investment in terms of tax. Therefore, we should flexibly use the tax advantages of the fund to effectively achieve the purpose of asset appreciation and preservation.
Revelation 5: The past is not always the preface to the future
People usually regard this generous return as an innate right after several years of good harvest. However, the China market in the past 1 years has proved that people should not infer the future based on historical performance. Just as everyone mistakenly assumes that the good times in 27 will last forever, it is equally foolish to expect the gloomy stock market to last forever. In fact, the stock market often has unexpected returns after a dry period. For example, after the bear markets in 21-22 and 24-25, the market rebounded sharply in 26-27. Driven by the global financial crisis, the market fell, but in 29, it went against the trend and walked out of one of the best performances in the world. In a word, past experience should not deter investors from the capital market, but show that prudent and diversified investment can be favored in various markets and economic climates.