It is not recommended to buy funds with a downward trend. If the fund is fixed, it is ok. General funds are fixed under the downward trend, and funds are fixed at the average cost. Therefore, it is ok to fix the fund in an upward trend or a downward trend, preferably a downward trend.

Fund income is determined by the investment target. When the investment target goes up, the fund goes up. At this time, investors can get income, and when the investment target goes down, the fund also goes down. At this time, investors will lose money.

Fund risk

Investing in hedge funds can increase the diversity of the portfolio, and investors can reduce the overall risk exposure of the portfolio. Hedge fund managers use specific trading strategies and tools to reduce market risk and obtain risk-adjusted returns, which is consistent with investors' expected risk level. The return of an ideal hedge fund has nothing to do with the market index. Although "hedging" is a means to reduce investment risks, hedge funds, like all other investments, cannot completely avoid risks. According to the report released by hennessey Group, during the period from 1993 to 2000, the fluctuation range of hedge funds was only about 2/3 of the S&P 500 index.

Transparency and regulatory matters

Because hedge funds are private equity funds, there is almost no requirement for public disclosure, and some people think it is not transparent enough. There are also many people who believe that compared with other financial investment management companies, hedge fund management companies are subject to less supervision and lower registration requirements, and hedge funds are more susceptible to special risks caused by managers, such as deviation from investment objectives, operational errors and fraud. 20 10 the new regulatory regulations proposed by the United States and the European union require hedge fund management companies to disclose more information and improve transparency. In addition, investors, especially institutional investors, also urge hedge funds to further improve risk management through internal control and external supervision. With the increasing influence of institutional investors, hedge funds have become more and more transparent, and more and more information has been published, including valuation methods, positions and leverage.

The same risks as other investments.

There are many similarities between the risks of hedge funds and other investments, including liquidity risk and management risk. Liquidity refers to the ease of buying, selling or realizing assets; Similar to private equity funds, hedge funds also have a closed period, during which investors cannot redeem them. Management risk refers to the risk brought by fund management. Management risks include: unique risks of hedge funds such as deviation from investment objectives, valuation risk, capacity risk, concentration risk and leverage risk. Valuation risk means that the net asset value of an investment may be miscalculated. Too much investment in a certain strategy will lead to capacity risk. If the fund's exposure to an investment product, department, strategy or other related funds is too large, it will cause concentrated risk. These risks can be managed by controlling conflicts of interest, limiting the allocation of funds and setting the scope of strategic exposure.

Some people think that some funds, such as hedge funds, will prefer risks in order to maximize returns within the risk range that investors and managers can tolerate. If managers invest in funds themselves, they will have more incentive to improve risk supervision.