To put it simply, a fund is to give the money in your hand to the fund company, and they use it to invest, such as buying stocks and securities, to obtain income. 1. Fund is a tool suitable for public investment. In the current market, in addition to savings and treasury bonds, financial investment tools include stocks, stock index futures, bond trading, gold trading, foreign exchange trading and securities investment funds (hereinafter referred to as funds). These investment tools have their own characteristics. Such as savings and national debt, there is no risk of loss, but the rate of return is low, and the funds are actually shrinking during the period of negative interest rates. Stocks attract a large number of investors, and "stock trading" has become people's daily talk. Retail investors have always said that "one rises, two draws and seven losses". Although it is not accurate, it illustrates a universal reality: the risk is great. For individuals who don't have rich stock market knowledge and practical experience, the probability of loss is greater than that of profit, and even "lock-in" has become a common language for investors. Stock index futures are more risky and may have higher returns, which may make people rich overnight or bankrupt overnight; Moreover, the threshold is very high, and at least 500,000 yuan must be invested at a time. Individual investors must never get involved. The risk of gold foreign exchange trading is relatively small, but it needs to have enough professional knowledge, grasp relevant information in time, and analyze and judge the market trend. It is difficult for ordinary retail investors to have such a level. Bond trading is less risky, but the yield is also lower, and it is difficult to conduct investment transactions because you are not familiar with listed financial bonds and corporate bonds. With the development of the fund industry, fund knowledge is spreading rapidly, and the public's understanding and understanding of the fund has not been interrupted. Especially during the big bull market in 2007, fund investment fully showed the "worry-free, labor-saving" money-making effect. "Buying funds can make money" has almost become a household name. Small vendors in the open-air market talk about funds while selling goods, and there are also many passengers talking about funds in the car. More and more people realize that the fund is a tool suitable for public investment. 2. The basic meaning of fund fund is a collective financial management method approved by China Securities Regulatory Commission and issued by fund companies, which enjoys benefits and bears risks. Fund companies concentrate investors' funds by purchasing funds from fund companies, which are managed by custodian banks. Fund companies use funds to invest in financial instruments such as stocks and bonds, and distribute investment income according to the proportion of investors' investment. This is an indirect way to invest in stocks and bonds. 3. Characteristics of funds (1) Collective investment fund companies pool investors' funds through issuing funds and invest in financial instruments such as stocks and bonds. Due to the low threshold for purchasing funds, the starting point for a single purchase is only 65,438 yuan+0,000 yuan. Ordinary people who want to invest have purchasing power, many a mickle makes a mickle, and can gather a lot of money. When investing in the securities market, the more abundant the funds, the more obvious the advantages, and you can enjoy the relative advantage of large investment to reduce the investment cost, thus obtaining higher returns than individual retail investment. (2) Expert financial management retail investors can't spend a lot of time and energy to learn securities investment knowledge, and lack practical experience, so it is difficult to obtain the expected return of securities investment. By purchasing funds, experts from fund companies are entrusted to invest at low cost, which saves worry, effort and time, and solves the problem of insufficient time, energy, knowledge and experience. Fund companies have a group of highly educated and specially trained experts with rich knowledge and experience in securities investment, forming a strong research team and a professional division of labor. For example, they specialize in the stock market trends of steel, automobiles, banks, real estate, business services, medicine and other different sectors. And hold meetings every day to discuss investment strategies to minimize risks and maximize returns. Their grasp and analysis of the national economic situation is much more accurate than that of retail investors, and the relevant information obtained is much richer in time, so that they can make a more accurate prediction of the price change trend of financial investment tools in the market, avoid investment decision-making mistakes to the maximum extent and improve the rate of return. (3) Diversification of risks There are always risks and benefits in any investment activity. The greater the general risk, the higher the possible benefits. The essence of investment is to strive for higher returns with lower risks. It is difficult for retail investors to do this in securities investment. As far as stock trading is concerned, among more than 800 stocks in/kloc-0, it is not only difficult to correctly choose the stocks with upward price trend, but also difficult to choose which sector. The experts of fund companies are not only better than retail investors in stock selection, but also invest in a combination of multiple stocks and bonds, rather than a single stock. With strong financial strength and scientific and reasonable investment portfolio, avoid "putting eggs in one basket" and effectively spread risks. 4. The security of the fund The security mentioned here is not the risk and possible loss, but the possibility that the investor's funds will be misappropriated. Once the fund company goes bankrupt, will it make the fund it bought lose everything? It can be clearly said that there is no such possibility! According to the regulations of China Securities Regulatory Commission, the assets of fund companies are not placed in fund companies. Fund companies are only responsible for investment and operation, and they can't touch money at all. The custodian bank is responsible for bookkeeping and financial management. The fund company must open a special account in the custodian bank. Except for the cost of purchasing investment tools such as stocks and bonds, the redemption amount of fund holders and the management fees that should be accrued by the fund company according to regulations and approved by the custodian bank, the fund company cannot use the funds, so the investors' funds will not be misappropriated. In theory, it is possible for a fund company to go bankrupt, but in fact, this possibility is very small and almost impossible. Even in the case of bankruptcy, no one or institution has the right to use the funds deposited in the special account for funds of the custodian bank, and investors' investment will never go to waste, which is completely safe. 5. Learn to master the knowledge of fund investment and share the benefits of fund investment. At present, investment and financial management has become an indispensable part of life. Investment and financial management is not only a fashion, but also a necessity. Investment and financial management is not just a game played by the rich, but a way for everyone to resist inflation and realize the preservation and appreciation of funds. "If you don't manage your money, money will ignore you", you lack financial awareness, don't know how to manage your money, can't invest, and it is difficult to fight inflation. Capital will inevitably shrink and depreciate, which is a serious obstacle to accumulating wealth and improving living standards. Now almost all newspapers have special financial management pages, and radio and television also have quite a lot of financial management content, which fully illustrates the importance of investment and financial management! The above introduction shows that in today's market, funds are the most suitable tools for public investment. However, as mentioned above, fund investment is as risky as other investments, and there is the possibility of loss. If you want to make a profit from fund investment, you must work hard and spend some time learning and mastering the necessary related knowledge. After you have the necessary knowledge, you should constantly sum up experiences and lessons in your investment practice, strive to improve your investment skills, and constantly improve your income. It is difficult to make a profit and may face losses if you rush into battle without knowing anything about fund investment. It is not difficult to master the necessary knowledge of fund investment. As long as you have the awareness of investment, everyone can learn to understand, and the economic benefits of fund investment will follow, enriching your life and increasing the fun of life in the practice of investment and financial management.