Another typical representative of the trend investment plan is the hatch plan, also known as the 10% investment plan, which was invented by the famous American investor Mr. hatch.
Its basic content is: investors compare the average stock price in a certain period (usually in months) with the highest or lowest value in the previous period, sell when the average value is higher than the highest value 10%, and buy when it is lower than the lowest value 10%, in which the monthly average value is calculated by the arithmetic average of the sum of weekly averages. This is a fixed investment plan. It follows the risk control principle of reducing risk, dispersing risk and transferring risk, and uses the short-term market price fluctuation of different kinds of stocks to control risks and obtain benefits. Specifically, there are classified investment plans, average cost investment plans, fixed amount investment plans, fixed proportion investment plans and variable proportion investment plans. These plans have different forms, but the basic principles are basically the same. The main features can be summarized as three aspects: First, all methods divide funds into two parts, namely, aggressive investment and protective investment. The former invests in stocks with relatively large price fluctuations, and its rate of return is generally higher and the risk is relatively high; The latter invests in stocks or investment funds with relatively stable stock prices, with stable returns and relatively low risks.
Second, determine an appropriate ratio between the two funds, and adjust the ratio according to the formula with the change of stock price, so that the combination of the two funds can reach the expected income level and risk control goal.
Third, investors buy and sell stocks mechanically according to changes in the market price level. The so-called technical analysis refers to investors' prediction of the future market situation according to the changing trend of stock market price and trading volume and the relationship between them, so as to buy and sell stocks at the right time to avoid losses caused by price decline and seek investment income. The main basis of this skill is statistics and charts.
The theoretical basis of technical analysis is Dow's theory, and the main tools are price trend chart, moving average, deviation rate, relative strength index (RSI), fluctuation line (ADL), volume analysis (OBV), empirical rule of price and quantity, etc. This is an investment skill that best embodies the principle of risk diversification. Portfolio, also known as asset portfolio or asset collocation, means that investors put their funds into several assets with different returns, risks and maturities at the same time, and with the help of asset diversification effect, the risk of a single asset is dispersed and the total investment risk is reduced. An effective portfolio should meet the following three conditions: the risks of the selected assets can partially offset each other; On the premise of a certain total investment, its expected return is the same as other portfolios, but the possible risk is smaller than other portfolios; The total investment is fixed, and its risk level is the same as other portfolios, but the expected return is higher than other portfolios. In order to make their portfolio meet these three conditions, investors should diversify their investments.
Investment diversification includes stock variety diversification, investment area diversification and purchase time diversification. Stock index futures trading is a new financial transaction. If the stock index futures are used for hedging transactions, the investment risk of investors can be greatly reduced.