We all know that when we invest and manage money, market conditions will have a great impact on our expected returns. When the market conditions are good, our expected returns are relatively high; when the market conditions are poor, our expected returns are relatively low. So when the market conditions are good, do you earn more by buying funds or stocks? Does the market index have an impact on the fund? For this issue, we have prepared relevant knowledge for reference.

When the market conditions are good, do you earn more by buying funds or stocks?

When the market conditions are good, do you earn more by buying funds or stocks? Generally speaking, you make more money buying stocks. But it is not necessarily true. Although the upper limit of expected returns of stocks is much higher than that of funds, in terms of the probability of making money, the probability of making money by buying funds is greater than buying stocks.

First of all, when the market conditions are good, the probability of a single stock rising is very high, because when the market conditions are good, most stocks in the stock market will rise, and the increase will be The increase is greater than that of the fund. Because the fund's net value will only increase when most of the stocks it invests in rise.

Secondly, when a bull market comes, it will first be reflected in the stock market. The fund market will not react until most stocks in the stock market rise, so there is a certain delay in the fund market's response to the bull market.

Why is it that buying stocks when the market is good does not necessarily make more money than buying funds? The main reason is that in a bull market, the probability of making a mistake when buying a fund is lower. Funds are about casting a wide net, while buying stocks is about single pressure.

Although most stocks will rise when the market conditions are good, there are also a small number of stocks that are not driven by the market index and even fall. If you buy this type of stocks, you may not make money even in a bull market.

In addition, if the growth rate of a single stock cannot outperform the broader market index, then there may not be any fund that earns more. Although funds generally do not rise as fast as stocks when market conditions are good, there are a small number of funds that rise relatively quickly.

Does the market index have an impact on funds?

The market index has an impact on funds, but the impact is different depending on the type of fund. Changes in the market index have a direct impact on hybrid funds and stock funds whose investment targets are stocks. Changes in the market index will be directly reflected in stock funds. However, for currency funds and bond funds whose investment targets are not stocks, the impact is indirect.