If there is a correction or a sharp drop in the market, assets will face a sharp drop. Therefore, it is safe to leave the bag, learn to redeem it in time, and the profit will continue to start the next round of fixed investment to achieve greater compound interest growth. Today, Bian Xiao will share with you how to choose the right redemption opportunity for your reference only!
How to choose the right redemption opportunity
In the actual fund transaction, fund purchase and redemption are the most basic operations, and many people think that its importance is simply ignored. In fact, there are many restrictions on fund redemption, such as cost, time, etc., so before redemption, various factors should be considered comprehensively to maximize the probability and maximize the income.
When you have the idea of redeeming the fund, ask yourself a few questions first:
1. What happened to the market?
See if the market has undergone major changes and whether the market valuation is at a high level. Is the long-term trend of the market getting worse? If so, then redemption may be needed to hedge. If the market is only hit by short-term events, there is no need to panic.
2. What happened to the fund products you held?
Check whether there are any major events that change the original operation of the fund and whether it is worth continuing to hold. For example, whether the fund manager changes, whether the fund investment strategy changes, and whether the fund scale grows too fast will substantially affect the future performance of the product. If you change your expectations, you need to find the right time to save them at this time.
3. What happened to your own asset allocation portfolio?
For investment funds, how the market goes is really important, but what is more important is your own situation.
If your partial stock position is really high, even if we think the stock market will strengthen later, we should consider redeeming some stock bases. Because our prediction of the stock market may be wrong, and the allocation of large-scale assets and the healthy proportion of various assets are the most important investment, and the situation of "you" itself is the core.
Investment funds must use idle money, and only money that can be used for a long time can be used for investment funds, because funds may be relatively biased towards medium and long-term investment. If the funds are not fixed, it is very likely that the fund investment will fail. If you need to recover the funds for other purposes, such as finding a better fund and changing funds, or having other better investment projects, or temporarily unable to pay attention to the funds and recover the funds first, you need to redeem them.
4. Think about a better way to invest after redemption?
If there is no better place for you to redeem the fund's funds, and you will eventually return to the market, it is recommended to make a long-term investment plan.
Some people may ask, since the known short-term risks have been anticipated, why not temporarily withdraw and then enter the market after recovery? In fact, when you are ready to quit, the market probability is already falling, and when you re-enter, the market probability has stabilized and is rising. This is actually a typical "chasing up and killing down". More importantly, the market will not develop in the way we expected. When you choose to leave to avoid market fluctuations, you will inevitably hesitate to enter the market next time.
According to the classification of funds, if you invest in index funds or index enhancement funds, you can use the fixed investment strategy as a tool for long-term investment; However, if you invest in actively managed funds, fund managers will adjust their positions independently according to the market environment, and every decline may be a layout opportunity for them.
Short-term fluctuations in the stock market are inevitable. In fact, investors should not care too much about short-term profits and losses. In the face of sudden market risks, if there is no pressure to spend money in the short term, you might as well be a patient person, and even make appropriate reverse layout when the market is irrational.
What are the exchange methods?
One-time redemption: before the fund decides to invest, set its own income target, which can be the rate of return or the amount of income. When the fund's fixed investment reaches the income target, all the shares of the fund's fixed investment are redeemed, which is safe at one time.
Redemption in batches: Fixed fund investment is a way to purchase fund shares in batches, or you can choose to redeem them in batches. When redeeming the fund, the share can be divided into n shares. When the target income reaches 1, the first share can be redeemed, and when the target income reaches 2, the second share can be redeemed, and so on.
Fixed investment after redemption: After one-time redemption, the fixed investment of the Fund cannot be terminated, and the redeemed money can be used as the principal for fixed investment again. This can not only lock in part of the income, but also avoid the phenomenon of worrying about the market going up and stepping on the air.
In practice, there may be many kinds of fund redemption methods, and everyone will have their own accustomed fund redemption methods. For general fund investors, you can choose the following three ways.
1, target redemption method
That is, set a "target rate of return" and redeem it decisively when it reaches this rate of return. As for the rate of return, what should be set? There is no standard answer to this question, but it depends on everyone's expectation of investment income.
Under normal circumstances, short-term suggestions are lower and medium-and long-term suggestions are higher; The broad-based index can be appropriately lower, and the industry or partial stock active funds can be slightly higher.
However, it should be reminded that this profit target should not be set too high. Because if you set it too high (such as 40% or 50% per year), then it is estimated that you can only achieve your goal in a bull market. A shares have always been short and long, and there is still a long time in between.
The difficulty of this redemption method lies in the personal understanding of the fund. If you don't know enough, then the setting of take profit point will be unreasonable. If it is high, it may not be reached for a long time. If it is low, you may miss the big waves behind.
2. Withdrawal and redemption methods
The biggest problem of using the target rate of return method to make profits is that you may miss more profits in the later stage. For example, your semiconductor fund was sold when it earned 15%. Results 1 month later increased by 10%. Your heart must be broken. Retreat and take profit method can easily solve this problem:
First, set a fund target rate of return, assuming that it is 20%; Secondly, set a retreat ratio, assuming it is 5%; In the end, when the yield reaches 20%, it will not be redeemed immediately, but will be sold when the net value of the fund falls by 5% in the later period. After the market is obviously adjusted back, it will gradually stabilize and then consider whether to reinvest.
Of course, this redemption method seems perfect, but it also has some shortcomings, such as setting the target too high, setting the withdrawal too small, or possibly missing the big market.
3. Valuation redemption method
The premise of valuation redemption method is: a general understanding of fund valuation, at least understanding of relevant market analysis.
The advantages of valuation take profit method are: clear rules, principled reference for operation, small deviation and relatively high income.
The operating principles of valuation redemption are: undervalued buying and overvalued selling, which are suitable for index funds. Buy when the fund is at a low historical relative valuation, and redeem when the fund is at a low historical relative valuation. Of course, you can't look at the valuation mechanically. Valuation should dynamically combine multiple dimensions such as market, industry, policy, news and capital to be more accurate.
For index funds, there are two main types of indexes that are tracked and compared:
Track or compare the indexes of Shanghai and Shenzhen 300 and Growth Enterprise Market; Track industry indexes such as medicine, food, banking and real estate.
In this way, we can check the valuation of the corresponding index to judge whether the investment cost performance is high or not. As a reminder, we should not only look at the level of valuation data, but also look at what level it is in history.
If the current valuation data is at a historical high, such as when the valuation has exceeded 80% in history, we should be vigilant, and everyone should sell relevant indexes or theme funds; However, judging from the historical valuation, the current valuation is still at a low level, such as in the last 20% position. As long as there is no "black swan" incident, there is no need to sell the fund in a hurry.
Now some institutions and self-media will sort out the valuation of major market indexes. But then again, whether the stock market goes up or down can't just look at the valuation. After all, policies, news and funds will have an impact on the stock market. Seeing more, learning more and thinking more will only be more beneficial to your investment.
The three profit-taking methods have their own advantages and disadvantages. You can choose the one that suits you best, and if you combine them, it is naturally the best.
How long will it take for the fund redemption money to arrive?
Different funds have different redemption times! The daily redemption time of the fund trading platform is as follows: monetary fund: 1-2 working days; Bond fund: 2-4 working days; Hybrid funds and equity funds: 2-4 working days; QDII:4- 13 working days (depending on the product).
Some special products may be delayed by one or two working days. Redemption of mutual recognition fund between China and Hong Kong, application for redemption on T day, and confirmation on T+2 day. You can check whether the redemption is successful on T+3 days, and the time for redemption funds to arrive is T+ 10 working days. Note that the trading days of the Hong Kong-China Mutual Recognition Fund are the same as those of the Mainland and Hong Kong.
It is easy to see that the liquidity of money funds and bond funds is relatively good, and the redemption of overseas funds is slow. After all, it is not convenient to go overseas.
Fund redemption does require a certain process and time. If there is no urgent need for funds in the short term, you can also choose to redeem the live treasure when redeeming the fund (T+ 1 can be confirmed at the earliest).
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