How long can the money used to buy the fund be kept in the fund?
Every sum of your money depends on time. Some people only invest short-term money, such as changing their mortgages next month, and some are long-term, that is, their idle funds will not be used in the past three to five years. Then, the investment direction of money with different time attributes is definitely different.
If the money used to buy funds needs to be used at any time, it is not suitable for stock funds, index funds and so on. It is more appropriate to put it in a money fund or an ultra-short debt fund. If it is long-term money, then you can make a long-term investment plan.
What is your expected rate of return on this investment?
How much money do you hope to earn by investing? If you manage your income expectations well, you can choose a variety that is more suitable for you. If your income expectation is high, for example, if you want to earn more than 20% a year, then the money fund will not be your choice. However, if you buy a stock fund, the market is better, and you can expect the annualized income to double.
How much loss can you bear?
Income expectation should be linked to risk. There is no product with high yield and zero risk. If you neglect your risk tolerance in pursuit of high returns, the process and result of investment may make you exhausted. Only by choosing a fund within your own risk tolerance can you become a rational investor.
In fact, investing in the right products is the core of investment. After asking these three questions and solving them, you can start the next step.