spread risk
The biggest feature of the index is portfolio investment. Stock index funds have at least ten investment targets, and the maximum position will not exceed 35%, which is normally controlled within 10%. In other words, the risk of a single stock has little effect on the index, and it is absolutely necessary for investors to diversify their investment appropriately, especially when the ability of stock selection and research level are not yet available.
Easy to understand
The biggest feature of index funds is simplicity and transparency. Any investor who is new to the stock market can understand them at a glance. For example, a securities ETF, except for three English letters, is a fund that invests in the securities sector. Its shareholding is transparent and its operation is established. This fund can trade like buying and selling stocks, and at the same time, it can achieve the same income as related indexes.
Flexible trading
The convenience of transaction refers to its good liquidity. The turnover of normal index funds is above 65.438 billion, which is convenient for ordinary investors to enter and leave. Secondly, it is about its distribution. You can allocate all its constituent stocks through an index. If you do it yourself, it will be difficult to achieve it easily. First, you have no access to funds. Second, you don't know what a leader is. In addition, most cross-border index funds and money funds are T+0 transactions, which is a simple paradise for investors who want to adjust their positions in time or trade in the day.
low cost
Because it is a passive fund, there is no requirement for the investment ability of the manager, mainly technical treatment, so the transaction cost is very low. For example, money funds are exempt from subscription and redemption fees.
Configuration ability
Index funds are conducive to cultivating investors' awareness of the overall situation and ultimately improving their asset allocation ability. Compared with 4,000 A-share stocks, there are only a dozen major industries, and only a few focus on them. It is easier to grasp the general direction than to choose one by one (4,000 stocks /40 industries). At the same time, there are cross-market, cross-regional and cross-term varieties, which give you a comprehensive asset allocation thinking.
When you are familiar with the investment of index varieties, you will find that your ability to grasp individual stocks has suddenly improved a lot. Because you have global thinking, industry judgment and leading ideas, for ordinary investors:
Index fund is the best tool to cut into the investment market!