No fund can run smoothly. A fund is to hand over money to professional fund managers to take care of it. Professional people do professional things. However, due to various reasons, fund managers sometimes make mistakes.
If you are holding a certain fund, you will also keep following up from time to time to understand the situation of the top ten stocks of the fund. However, at this time, you find that the funds you bought If a heavyweight stock is hit by a thunderstorm, what are you going to do?
Many people will choose to redeem it temporarily, wait until the fund stabilizes, and then find a low price to buy it back, or simply change to another fund to invest.
Is this really desirable? How should we deal with funds whose heavy holdings are under fire?
Analyze the impact of heavily held stocks on the net value of the fund
The first thing we have to do at this time is to stay calm.
Generally speaking, the position of a certain heavily held stock will not exceed 10% of the fund's asset size. Therefore, even if this heavily held stock falls sharply, the impact on the fund will be prioritized. This is the risk diversification advantage of fund investment.
Of course, this does not mean that we can ignore everything after the heavy stocks are hit by thunder. At this time, we can check the relevant information to see the increase in holdings of shareholders and the price of large transactions. If no obvious occurrences occur, changes or is higher than the closing price, indicating that shareholders are optimistic about the long-term investment value of the stock. Don't rely on media reports to believe that the wind will be the rain.
Remain vigilant while ensuring rational analysis.
After analyzing individual stocks, let’s take a look at the dynamics of fund managers. Some fund managers will be very insistent on their own investment philosophy and investment strategies, and have their own fixed standards. When they are optimistic about individual stocks, they will choose to hold them firmly for a long time. Therefore, the changes in heavily held stocks are generally relatively small, and the fund changes hands. The rate is also relatively low.
Of course, there is also a type of fund manager who is accustomed to seizing investment opportunities in the market, maintaining a keen sense of smell and quick reaction ability to the market at all times. Changes in heavily held stocks will be relatively large, and it is easy to happen. Investment style is cheap. This is related to the investment style of the fund manager. The former is relatively stable, while the latter is more inclined to obtain high returns. There is no absolute good or bad.
After judging from the above angles, you can decide how to operate.
If you judge that this heavily held stock will experience a continuous decline after hitting a thunderstorm, for example, two or three lower limits or even more, it is recommended that you redeem it immediately and stop the loss in time.
Of course, if you find that the price of the stock has not changed significantly after this stock has been hit by thunder, you can remain in a wait-and-see state, because sometimes operations that are too anxious will often be slapped by reality. A slap in the face, you thought the stock price would never recover, but after redemption, you found that the stock price remained unchanged. Even rising against the trend. It will not have any impact on the funds you buy.
Of course, there is also a type of people who want to operate, but are afraid of making mistakes and do not operate. They also feel that doing nothing is not good. In this case, you can choose to redeem part of it. Stay on the sidelines next year.
It is normal for the market to fluctuate, and fund prices will not always rise in a straight line.
The most important thing is that we must maintain rational thinking and learn to analyze its inherent logic of rise and fall.
If you cannot clearly judge whether the heavily held stocks will continue to fall, the recommended approach is to stay still and wait and see.
Furthermore, the data on the fund’s top ten holdings are not updated in real time. The fund updates its regular reports most frequently once a quarter. Maybe the fund manager has already made a judgment in advance when this stock hits the jackpot. Positions were adjusted to reduce risks.
I hope the above content is helpful to you.