However, I seldom see anyone who can really understand this sentence.
Diversification of risks is the most basic common sense in investment and financial management, but it is not that simple to truly diversify risks.
Invest in products with different basic assets
Many products look like two things, but the underlying assets are the same.
What do you mean?
All wealth management products can't make money by themselves, and they all need to invest money to make money. We need to see what this product is invested in.
Just like index funds, all Shanghai and Shenzhen 300 index funds follow the trend of Shanghai and Shenzhen 300, so even if you buy the difference of 10, it will fall, and it will not play the role of diversification at all.
Then I'll buy two different products, stocks and funds, and go to the head office.
No, because the stock fund in the fund itself invests in stocks, there will also be a situation in which the fund you bought is highly related to stocks, and it will suddenly fall.
The correct way is:
Invest in products with different basic assets.
For example, in the same index fund, you can invest in a Shanghai-Shenzhen 300 index fund and a Shanghai-Shenzhen 50 index fund, because the two types of funds track different indexes and invest in different assets, so the correlation is relatively low.
But this is not scattered enough, because the stock market may also fall as a whole because of some macro factors. Therefore, in order to be more diversified, in addition to stock funds, we should also choose some bond funds or gold ETF funds, which has lower correlation and is unlikely to rise or fall at the same time.
Invest in products with different risk categories
In addition to the low correlation of various investment products, the risk categories of various products are also different.
Some friends did invest in several unrelated products, but they were all high-risk. Is the overall risk still high?
Or the other extreme: everyone buys low-risk wealth management products, and the overall risk coefficient is relatively low, but the rate of return is not high, and it can't even resist inflation.
The correct way is:
Divide the principal and invest in high-risk, medium-risk and low-risk wealth management products respectively. Use low risk to ensure that the principal is not damaged, and then use part of the money to strive for high returns.
As long as the proportion is well matched, the income of low-risk investment can be guaranteed as much as possible, and the loss of high-risk investment can be made up.
As for which risk category to invest more or less, you can allocate it reasonably according to your risk preference.
Products with different investment periods
In addition to considering risks and benefits, we should also consider the liquidity of funds. Therefore, it is best to spread the funds among wealth management products with different maturities.
For example, many friends say that investment means buying a house, and that buying a house is the most profitable.
But buying a house is actually a long-term investment. Even if the house price rises in the second year after you bought it, you have to wait another month or two before you can go through the formalities. I don't feel it at ordinary times, but if I need money urgently, I don't have to rush to sell the house now.
The correct way is:
According to your own capital demand planning, make a good choice of different investment periods. Make sure you have a certain amount of liquidity in case of emergency.
We have always suggested that you keep the normal family expenses for 3-6 months, and this fund must have relative liquidity. For example, you can invest in some bond funds, innovative deposits, money funds and so on. You can take it away.
In addition, it is not needed at present, but may be used in a few years, to invest in some medium-and long-term wealth management products with less liquidity, such as national debt, wealth management within five years and so on.
There is money you don't need at all, so consider making some long-term product investments, such as real estate and fund fixed investment.
Don't be too scattered.
In addition, some friends are too pursuing diversified venture capital, which is actually wrong. If the funds are too scattered, it will increase a lot of management costs.
Many people know the saying "Don't put your eggs in the same basket", but there is a saying behind this sentence "Don't put your eggs in too many baskets".
After all, investment should take into account risks, returns and liquidity. If we spend too much energy on selecting wealth management products, we should also remember the expiration date of each product, so wealth management products involve too much time and energy, and even delay our work, which is extremely uneconomical.
The correct way is:
It takes time, but do your best.
If you are a novice, choose some methods suitable for beginners.
For example, the fixed investment of index funds is recognized by the industry as an investment suitable for novices.
As long as you invest money regularly and quantitatively, you don't need to pay too much attention to the market.
Because buying an index fund is equivalent to buying national wealth, no matter how it fluctuates in the short term, as long as we collect more low-priced chips at the low level, there will always be a profit-taking point.