Among the many reference data of funds, there is an index called maximum retracement, which is used to measure a fund's ability to control risks. The standard definition of maximum retracement is: pushing back at any historical point in the selected period, the maximum value of return retracement recovery when the net value of products reaches the lowest point, that is, the worst situation that may occur when buying products, that is, the maximum loss value that may occur in the statistical period, and the maximum value of decline from any high point to its subsequent lowest point.

For example, in a month, the highest point of a fund's initial net worth is 1.6 yuan, and then when the fund's net worth falls to the lowest point, it is 1.6-1. 1 = 0.5, then the maximum loss is1.kloc-0/= 0.5, divided by the highest point/kloc.

The maximum retracement function can reflect the management ability of fund managers, and the management ability of fund managers whose maximum retracement is controlled in a reasonable standard is stronger. The maximum retreat is proportional to the risk. The greater the retracement, the higher the risk of the fund, and the maximum retracement index is also the assessment standard for us to choose the fund. The biggest impact of the biggest retracement on the income is the effect of compound interest on fund investment. If a fund rises by 100% this year, it will withdraw by 50% next year, and the compound interest will be zero.

How to control the risk of the fund?

First of all, we insist on long-term investment, and the withdrawal of funds is normal. When the fund retreats, all we have to do is make friends with time. 80% of the fund's income comes from 20% of the time.

The more the fund falls, the more it buys. When the fund is facing retreat, it is an opportunity for investors to increase their positions and get more shares at a lower price.