When buying a fund, many investors are saying that it is better to buy a fund at a low valuation. Beginners who don't know much about funds will think about buying funds at low valuations, okay? Will the fund make money by buying at a low valuation? I hope you like it.
Can the fund buy at a low valuation?
Whether it is good to buy a fund at a low valuation depends on the situation, because buying a fund at a low valuation does not necessarily go up, and the fund does not go up mainly because of the investment target. So if the fund buys at a low valuation and the fund just goes up, then the fund will make money, which is of course good, but if the fund buys at a low valuation, but the market has been bad and falling, then the purchase will lose money, which is not appropriate.
Generally, the low valuation of a fund will not determine the rise and fall of the fund. The low valuation of the fund can only show that the fund has investment value. Fund valuation refers to the process of calculating and evaluating the value of fund assets and liabilities at fair prices to determine the net asset value and net fund share value. If the fund is overvalued, it shows that there is a bubble in the fund, and its investment risk will be greater and the possibility of loss will be greater.
Will the fund make money by buying at a low valuation?
Whether a fund will make money at a low valuation depends on the situation. It is necessary to analyze from many aspects whether the fund has prospects and whether it will go up. There are always people who think that it is cost-effective to buy a fund at a low valuation, and it is more likely to rise. But after buying it, I found that the fund has been falling, which is bottomless. Even if the valuation of the fund is very low and there are investment prospects, if the fund continues to fall, it will suffer heavy losses.
Funds belong to cyclical industries. If the industry happens to be in recession, the fund will present a low valuation at this time, but it may not rise until the next cycle after buying, so the investment cycle is long.
Secondly, when buying a fund, we should not only look at whether the fund is undervalued, but also consider many other factors, such as the fund type, the past income of the fund, the experience of the fund manager, the fund size, the morning star level, the annualized rate of return and so on.
Funds are risky investments and will lose money when the market is bad. Therefore, they must be cautious when buying. If they can't afford to take risks, they can consider bank time deposits. Bank time deposits are guaranteed capital and interest, and there will be no loss.
How to study the company's fundamentals
Analysis of the company's financial statements, the main indicators of financial statements are price-earnings ratio, price-to-book ratio and so on. These indicators are the concrete embodiment of the investment value of listed companies and the most important part of the company's fundamental analysis; Investors can also analyze the industry in which the company is located, mainly including the development prospects of the industry in which the company is located and its position in the industry.
In addition, the market share of the company is analyzed, mainly on the share of its products in similar products and the coverage of its products; Analysis of the company's intellectual property rights, independent intellectual property rights are the foundation of the company's development and growth, but also the source and guarantee of stable profits. Reminder: The stock market is risky, so be cautious when entering the market!