Generally speaking, fund investment mainly faces two types of risks.
The first category is the risk of loss caused by capital fluctuation.
The second category is the risk that the expected return cannot be realized.
First of all, let's look at the first risk, which is also the first reaction risk of investors, whether for high-risk and high-yield stock funds or relatively stable bond funds.
In the market where the stock market is down, stocks may be negative for a whole year. If it is in a short time, say, a week or a month, the fluctuation will be even greater. Even if you invest in stocks and bonds at the same time, there is no guarantee that the income will be positive, because although the income of bonds is relatively stable, there is no guarantee that you will not lose money at all.
Let's take a look at the second type of risk, the risk that the expected income of financial management cannot be realized.
We invest not to lose money, but to make money. Therefore, earning income is the ultimate goal of our investment. While worrying about losses, we should also strive to create positive income.
In the process of investment, if we pay too much attention to the short-term fluctuation of the market, it is easy to ignore the second risk, which will eventually lead us to make our investment plan too conservative in the process of investment, and will also affect our investment decision.
For example, in the actual investment process, because we pay too much attention to the short-term performance fluctuation of fund products, we always choose between buying and selling, hoping to maintain income or reduce losses, rather than considering whether we can achieve financial goals from the product itself.
Knowing these two risks, we should try to balance them in future financial management.