For people who invest in funds, before buying a fund, most of them think about making money, or how to make money, and rarely think about how to deal with losses. So when the fund I bought really fell, I didn't know what to do. If the fund you bought keeps falling, should you sell it?

First of all, look at what fund you buy. People who have this problem will definitely buy funds with higher risks, such as stock funds and stock hybrid funds. If they buy low-risk funds, this problem will basically not exist.

So, if it is a high-risk fund such as a stock fund, will it keep falling, or even stop falling? Most likely not. Because the rise and fall of stock funds has a lot to do with the stock market, and is even determined by the rise and fall of the stock market, and the stock market never only falls but does not rise.

Of course, for a declining stock fund, whether it can recover when the stock market recovers depends on whether it can persist until the market recovers. When the market is bad, the number of funds that cannot insist on liquidation will also increase. However, even if the fund is liquidated due to continuous decline, its net value will not fall and there will still be a surplus.

So, for falling funds, as long as there is no risk of being liquidated, you can always hold them and not sell them.

So, which funds face greater risk of liquidation?

Of course, closed-end funds will not be liquidated as soon as the contract expires. They may be renewed or converted into open-end funds to continue to exist.

Secondly, in addition to the fund itself, it also depends on whether the person who buys the fund has the conditions to hold the fund. Many people who buy funds want it to rise immediately after buying it, and sell it when they make a profit. They have no long-term plans and patience.

For this type of investors, even if the fund falls and there is still a chance to rise, they may not be able to wait until that time. Especially when the fund declines for a long time, there is a high probability that such investors will not persist until that time. Therefore, if the fund keeps falling, you have to consider selling first. Before buying, it is best to think clearly about how much you have lost, and try to control the loss within a range that does not hurt your muscles. Otherwise, not only may you lose more, but once the principal loss is too large, it will be difficult to earn it back in the future.

As long as the fund will not disappear, those who can hold it for a long time do not have to worry about the fund falling, because there will always be a rise. If you are brave, you can even consider adding positions after the fund plummets, hoping to earn more in the future.

So, as for whether you should sell the fund, if the fund has no liquidation risk, it mainly depends on how determined the individual is to hold the fund. Related Q&A: Has the fund fallen?

The fund may fall. The funds invested by investors in the fund will be lost due to losses in the fund. Especially if the investor invests in high-risk funds in the fund, such as stock funds, then the probability of the fund experiencing losses will be greater. Most funds have a liquidation line. When the loss reaches 75%, they will be forced to liquidate and return investors' funds. Therefore, these funds will not continue to lose money until they are short of money.

What to do if the fund falls

1. When the fund falls, investors should increase or cover positions according to the situation. When the future trend is better, investors should Decisively add positions to obtain more returns in the future. When the trend of the fund is not good in the future, fund investors should decisively reduce their positions or directly redeem and flee;

2. When the fund declines When investors want to invest in a fund, but the trend of the fund is really not good, they can choose to switch the fund to other funds. Related Q&A: If the market value of the fund drops, will it drop to nothing? On what basis?

If the fund keeps falling, will it drop to nothing?

Don’t worry, no matter how much the fund falls, the possibility of it falling to a penny is almost non-existent.

Because funds generally invest in dozens of stocks, if you want the fund to fall to a penny, you must not go bankrupt in these dozens of stocks. If you want to say that the fund has always avoided making mistakes, many people may not believe it (I don’t believe it either), but it is almost impossible to make mistakes in dozens of stocks at the same time. So don't worry about the foundation losing your principal.

Some Christians may ask, why did the cumulative net value of Soochow Convertible Bond B Fund (150165) not only fall, but also fall into a negative number?

It is indeed impossible for a fund to fall, let alone a negative number. Therefore, there is only one explanation for this situation, and that is that the fund has increased leverage.

There are currently three main types of funds involving leverage:

1. Active bond funds

According to the "Measures for the Operation and Management of Publicly Offered Securities Investment Funds", open The leverage of bond funds can reach 140%, and the leverage of fixed-term bond funds is even higher, reaching 200%.

So here is an extreme example.

Suppose the net assets of a fixed-term bond fund are 1 billion, and the fund manager chooses to sell the 1 billion bonds he holds. Mortgage it out, and then use the mortgaged funds to invest in bonds. In the end, the total assets of this fund became 2 billion.

When the decline of this fixed-term debt fund reaches more than 50%, then the net value of the fund may be negative.

But what Sansijun wants to say is that it is difficult for actively managed bond funds to fall by more than 50%. Because bond funds invest in dozens of bonds, it is almost impossible for the fund to hold these dozens of bonds and hit the market at the same time.

At the same time, judging from historical data, there are not many bonds that default, and even if there is a default, it is unlikely to lead to a total loss.

So even if active bond funds keep falling, there is almost no possibility of them falling.

2. Funds that invest in stock index futures and commodity futures

It is impossible for funds that invest in stock index futures and commodity futures to have negative numbers.

Because this type of fund has strict position requirements for the stock index futures and commodity futures it invests in, and when the losses in the stock index futures and commodity futures invested reach a certain level and the margin is insufficient, a forced liquidation will be triggered. .

So it is impossible for it to fall.

For example, China Universal Absolute Return will open a mixed fund (000762). According to the prospectus, no matter whether it is during the open period or the closed period of the fund, the sum of the value of futures contracts and the market value of securities held by it cannot exceed 100%.

3. Graded funds

Graded funds are relatively complex fund types. So Sansijun is here. To put it simply, share B borrows money from share A to invest, and share A regularly collects the interest from share B.

Through this explanation, it is not difficult to find that for the holders of share B, as long as the interest on share A is paid regularly, they will be responsible for their profits and losses.

So as mentioned above, Soochow Convertible Bond B Fund (150165) obviously lost all its own money, otherwise how could the cumulative net value of share B be negative.

However, according to the latest regulations, there is now a threshold limit of 300,000 for investment in graded funds, so ordinary investors should not have access to this product.

Well, the conclusion is that no matter how the fund falls, it is impossible to lose it. It is almost impossible to lose a penny.