So, can investment funds achieve financial freedom?
The heartfelt answer is: it is possible, but it is difficult. The probability is similar to buying one in the lottery shop next door.
Why?
First, the principal is limited. The investor's principal is the basis of income. Most people can invest, and the scale of idle funds is limited. The average size of China's investor investment funds does not exceed 65,438+10,000. If you lend me 100 million yuan, I can be rich and free without moving my principal. On the contrary, it will take many years for a hundred thousand principal to get rid of wealth, even if compound interest is the same as Berkshire Hathaway.
Second, the rate of return is limited. The rate of return that investors get is a multiple of the income. The fund's rate of return is subject to the market benchmark rate of return and the excess return generated by the fund manager's investment ability (including luck). As far as the return on basic assets is concerned, stocks have the highest long-term return on the earth. To what extent? It is probably the return on equity of the enterprise. In the long run, it will be good if there is an annualized rate of 8%~ 10%. Coupled with the excess income generated by the fund manager's ability, the overall income of the fund 10%- 15% is very good. Like Buffett, the long-term annualized income is about 15%-20%. According to the statistics of China Fund Industry Association, the long-term return of partial stock funds in China is about 17%. However, it is very good to ensure that it can be annualized 15%-20% for a long time.
Limited principal, low return on investment and limited financial freedom. Although it is difficult to achieve financial freedom, if you can invest in the fund in the right way for a long time, it will accumulate considerably. So how should investors invest in funds? The easiest thing to think of is that the fund price will go up and down. If I buy when I am low and sell when I am high, won't I make money? That's a good idea, but what is low and what is high? You predict the basic rise, I predict you predict the basic rise, you predict me predict you predict the basic rise. . . . . . What most investors in this market are predicting is that most investors can't succeed and can't sustain. Therefore, honestly investing in index funds is the most suitable investment method for ordinary people that Buffett has always recommended. Especially typical, such as CSI 300, CSI 500, and A50, which has been popular recently. If you are bold enough, you can even do the Hang Seng Index in Hong Kong or the Standard & Poor's 500 in the United States. However, I still suggest using these indexes to equip myself. After all, we are all optimistic about the future development of the country. You can choose to invest at a fixed time every week and month instead of breeding horses. If a person insists on the idea of asset allocation for a long time and invests in index funds of A shares, I dare not say that he will definitely achieve financial freedom, but he will definitely become richer and richer.