Where is the index fund, which makes the stock god so favored? This should start with the index.
Index is to select a basket of stocks according to certain rules and reflect the average price trend of these stocks.
For example, the CSI 300 is an index composed of 300 large listed companies selected from the Shanghai and Shenzhen stock exchanges;
SSE 50 is an index composed of 50 largest, most liquid and most representative stocks selected from Shanghai stock market.
Under normal circumstances, Alipay's homepage will recommend "active funds" to us. The specific stock or bond to buy is decided by the fund manager, so the income also depends on the ability of the fund manager. The performance of index funds has little to do with fund managers. There may be many fund companies tracking the same index, but the returns of these index funds will not be particularly different.
The performance of index funds has little to do with fund managers. There may be many fund companies tracking the same index, but the returns of these index funds will not be particularly different.
If you only buy a company's stock, the company may go bankrupt because of poor management, but the probability of bankruptcy of hundreds of companies selected by the index is too low; Moreover, according to the selection rules, these poorly managed "bad companies" can't stay in the ranks of index stock selection forever, and their position will be replaced by new and better companies.
As long as the country is stable and the economic situation continues to improve, the companies behind the index can create more and more profits. Although performance may decline in some years due to economic crisis or difficulties, profits will definitely increase in the long run.
Therefore, long-term investment in index funds is much better than investing in certain stocks.