What does the fund cover the position mean?
Covering a fund's position refers to buying a fund at a low level when the net value of the fund has fallen and investors have incurred losses, so as to reduce the cost of the fund originally held.
For example, if an investor buys a fund, the net value is 2 yuan. After buying 1 0,000 shares, when the net value drops to 1.5, investors continue to cover the position by 2,000 yuan, so the fund position cost at this time is (2+ 1.5)/2 = 1.75 yuan, which is lower than the level at the time of purchase. Then, if the net value of the fund rises to 1 in the later period, the cost and profit point will be reduced by covering the position.
When covering positions, investors are advised not to blindly cover positions, first analyze the reasons for the decline of the fund, and then analyze the subsequent development trend of the fund. But also depends on the professional level and ability of the fund manager, and finally consider whether to make up the position and minimize the loss.
Also depends on the timing. After judging the trend of the fund, it is best to buy it before 3 pm on the trading day, which can reduce the cost. The net value of funds bought after 3 pm is calculated according to the net value of funds on the next trading day.
What is the purpose of covering positions?
The purpose of covering positions is to reduce the cost of holding positions, reduce the profit point of investment and reduce risks.
The lower the fund cost, the less investment risk investors need to bear. When the net value of the fund is lower than the investor's position cost, it can cover the position. The lower the net value of the fund, investors can buy more fund shares with the same funds, which can reduce the cost of the fund. When the net value of the fund is higher than the investor's position cost, it is not suitable for covering the position. The higher the net value of the fund, the less shares investors buy with the same funds, which increases the cost of the fund, so the investment risk of investors will be greater and the possibility of subsequent losses will be greater.