First of all, fund investment is also an investment, and you can start with spare money. If you have problems in solving basic living needs, don't consider buying a fund for the time being. It is more important to consider how to cut expenses and maintain life first. Since we have spare money, we can make a careful plan.
In the face of investment, most ordinary investors always blindly follow suit. Some people put all their money into the stock market when it was good, and then they were cut off, and it was too late to regret it. Some people say that a good fund investment is to buy all the funds at one time, just like buying a fund will definitely make money, so we must seize this opportunity to make money.
However, fund investment is also risky in the short term. If you put all your money in and continue to use it, your original investment plan will be disrupted, and even if you want to redeem it in a very bad market situation, it will be a big loss. In order to avoid this situation, we should first consider how much it is appropriate to buy a fund.
There is a very simple way to help you allocate assets, which is called "trisection". One third of the money is used to buy fixed assets such as real estate, one third is used for investment, and the remaining one third is saved. This method was put forward more than 2000 years ago. Surprisingly, it still applies today.
There is also a method called "finger algorithm", which needs to be calculated according to your age. Expressed as:
Proportion of assets available for various investments = 100- your age
If you are 40 years old, you should not invest more than 60% of your assets. Our investment strategy will change with your age. The older we are, or the closer we are to the target time of investment, such as children entering university, we can appropriately convert stock funds into sound bond funds.
No matter which method you use, remember that you can't invest all your money in the fund. In case of accidents such as illness and unemployment. There is still room for manipulation. Moreover, this part of the funds you use to invest in the fund must be idle funds, even if it is a loss, it will not shake the basic life.
Although the average annualized return of the fund market is about 12%, it is the average of a long investment cycle and definitely does not represent the inevitable return every year. If you put all your money into it, you will be under the pressure of only winning and not losing, and the final result will be complete failure.
Rational allocation of assets helps us to face the market calmly and profit and loss rationally. In order to master the correct investment method.