A fund portfolio is a pile of egg baskets.
Everyone should have heard of the saying "Don't put your eggs in one basket" when investing in financial management. The eggs in it refer to your money, which means that your money should be divided into different parts and put in different baskets, so that we can avoid the risk that all eggs will be broken if one basket is broken.
And this kind of risk diversification behavior is portfolio. An excellent portfolio can reduce your overall risk and meet your historical expectations and annualized expected returns!
So which baskets (investment products) do we put eggs (money) in? How many eggs should be put in each basket?
Please see the rule of 333 1.
Under the rule of 333 1, we have four big baskets, and small baskets can also be nested inside the big baskets. Only when the small baskets are arranged can the big baskets be more stable. Today we are going to talk about how to allocate eggs in the two big baskets of "long-term investment" and "short-term investment"!
30% short-term investment
Short-term investments generally have a specific financial goal, such as wanting to travel abroad next year! Or more urgent, I will get married the year after next, and I want to save more wife books! For this kind of goal, because the time to achieve it is tight, there is a high liquidity demand, and the risk should not be too high, so the expected annualized expected return will not be very high, and generally 5%~ 10% is better.
Specifically, it is suggested that 30% of the short-term investment basket be divided into two small baskets: one small basket contains ultra-short-term investment products with good liquidity and low expected annualized return, such as bank wealth management and money funds, with expected annualized expected return of 4%~5%. In another small basket, investment products with longer investment time and higher expected annualized income, such as planned savings assistants (belonging to P2P online loans), have a term of 3 months to 1 year, and the expected annualized expected income is about 7% to 10%, so the risk is not high.
30% long-term investment
Good planners have always emphasized risk control, which is undoubtedly correct. But don't forget, we are still young, the investment period is still very long, and the risk tolerance is much higher than that of older people. Therefore, during this period, we still have to contact some high-risk assets in order to strive for higher expected annualized expected returns.
Equity funds are characterized by high expected annualized expected returns. Of course, because they invest in stocks, the risk will not be low. But if we have enough investment time and insist on fixed investment, the risk can be said to be very low. So in the long run, investing in equity funds is a good choice. In addition, because bonds and stocks often have a seesaw effect (one falls and the other rises), the allocation of bond funds can reduce the overall risk of the portfolio.
Summary of financial planner
To be honest, there is no standard answer for portfolio. Everyone's expected annualized rate of return, risk tolerance, liquidity demand and preference for wealth management products are different, which will lead to different portfolio composition and capital ratio. Based on the 333 1 rule that planners think is the most reasonable, the series of courses on Lazy Investment will take you through a simple investment and financial management process step by step (from income distribution, investment product confirmation to portfolio construction). Because it is for us lazy people, we try our best to explain the key issues clearly and simplify the complex issues so that everyone can understand and learn from them. However, the road to investment and financial management lies in persistence. Even if we lazy people master simple methods, we should learn to think for ourselves, adapt ourselves and control our risks.
333 1 rule combination
333 1 rule is really a good thing. In addition to fund investment, it also involves some other investments to help investors better spread risks.