What are the advantages of index funds?
Disadvantages of index funds:
1, index funds fluctuate greatly, which is very risky for users who make short-term investments;
2. Index funds lead the gains and losses. In the industry market, index funds generally have strong positions, and there is no way to avoid risks in the stock market through the management of fund managers. Therefore, once the index fund plummets, it will fall a lot;
3. Selling index funds is risky. If the user wants to sell the fund early, it may be a situation of buying high and selling low, which may easily lead to investment losses;
4. Not all the conditions for the fixed investment of index funds are met, and users need to have an exact identification, otherwise the actual effect is very different. Users need to attach great importance to these two aspects when choosing index funds. On the one hand, they need to choose funds that track the growth of the index better. On the other hand, we choose to track some index funds with small deviations. The smaller the deviation of index funds, the stronger the management ability of fund managers, which can help users reach the target rate of return faster.
Advantages of index funds:
1, low cost: because the index fund tracks a specified index, it does not need any investment countermeasures from the manager, so the capital investment cost is not high, and the period cost is lower than that of the equity fund or the enhanced index fund;
2, the performance is more transparent: because the index fund tracks an index, the change of the fund's net value can be directly seen through the increase of the index, so there will be no forgery;
3. Diversification: Choosing an index fund is equivalent to buying a basket of stocks, with less risk:
4. Small management risk: namely, index funds will not have the risk of stock selection, stock selection and stock exchange.
This paper is mainly about the advantages and disadvantages of index funds, and the content is for reference only. If you plan to buy a fund, you must consider it comprehensively.