In financial investment, there is a loss when there is a profit. Once a loss occurs, how to recover it in time is the key. Stop loss is one of the methods. The following are four tips for fund stop loss compiled by Bian Xiao, which are for reference only and I hope to help you.
What are the ways of fund stop loss?
1. Variety stop loss
There is no such thing as a stop loss in money market funds. It is mainly used as a tool to invest in the one-year money market. Depending on the liquidity of fund management, there will only be a problem of earning more and earning less. The stop loss of capital preservation mainly depends on time. The stop loss of stock funds mainly depends on the change of economic cycle. When the economy is booming, it can play a role in avoiding risks, but when it stops during the economic recovery period, it will have an adverse impact because the stock investment market is vacant. The stop loss of another fund type, bond fund, is inextricably linked with money market fund. If you raise interest rates, you will consider stop loss.
2. Combination stop loss
In order to diversify the risks in investment, investors will put their funds on different fund products, forming a portfolio investment model with three styles: radical, steady and conservative. With the change of investors' risk-taking ability, we can change the investment varieties and change radical funds into stable and conservative funds.
3. Stop loss in operation mode
Mainly to cover the positions of funds with excellent performance and reduce their costs, so as to achieve the purpose of reducing risks. Or by optimizing the investment portfolio, the risk of over-investment can be avoided. You can also use the fund conversion function of the fund manager. In the bull market, exchange bond funds for stock funds to increase income. In the volatile market, exchange stock funds for bond funds or money funds to avoid risks. Or investors can also pay attention to the issuance of new fund products and make an investment model combining old and new funds to earn income.
4. Mechanism stop loss
There is an aphorism in financial investment "Don't put eggs in one basket", that is, allocate funds according to the proportion of bank deposits, insurance investment and capital market, and do a good job in risk management of equity assets, which is stop-loss funds.
Four skills of fund stop loss
Variety stop loss
Money market funds have no stop loss. Money market funds mainly invest in one-year money market instruments based on liquidity management of funds. Investors investing in money market funds is only a matter of earning more and earning less. The stop loss of capital preservation fund products depends on time. Only when investors buy fund products during the subscription period and hold a three-year hedging period can the principal be guaranteed to be safe. As long as it is held for three years, even if there is a loss during the holding period, investors don't have to worry too much, because there is a third-party institution as a guarantee. Stop loss of stock fund products should grasp the change of economic cycle. Only when the economy is booming, the stop loss will play a hedging role. If you stop loss during the economic recovery period, the investment situation will be unfavorable because you step on the stock market. Similarly, the stop loss of bond fund products should also consider the change of monetary policy. If you are in an environment of raising interest rates, investors can consider stopping losses. Because the performance of bond fund products is closely related to monetary policy. The increase of interest rate will lead to the decrease of bond price. The stop loss of ETF, LOF and graded funds depends on the relationship between supply and demand of funds in the securities market, especially the arbitrage opportunity between their prices and net worth.
Combined stop loss
That is, investors will no longer pay attention to a single fund product, but to the change of portfolio style of radical, stable and conservative funds. If the investor's ability to resist risks changes, it should not be limited to the original fund product portfolio, but should actively adjust from the aggressive fund product portfolio to the stable or conservative fund product portfolio.
Operation mode stop loss
Mainly by covering the positions of excellent fund products, the cost of holding fund products is reduced to a certain extent, so as to reduce the risk of holding funds. Or by optimizing the portfolio structure of fund products, the risk of concentrated investment of fund products can be avoided. Using the function of fund managers to convert fund products, bond funds and money market funds will be converted into stock fund products, which will increase in value in the bull market, and stock fund products will be converted into bond funds and money market fund products to hedge risks in the volatile market. Or by paying attention to the issuance of new fund products, we can implant the experience of holding old funds into the new fund for management and share the operation opportunities of the new fund. This combination of old and new investment model can enhance investors' investment confidence to a certain extent, thus producing good investment results.
Mechanism stop loss
In other words, we should use the financial thinking of "not putting eggs in the same basket", redistribute family assets among bank deposits, insurance and capital markets, strictly abide by the investment rule of 100, and determine the investment ratio of stock fund products. The establishment of risk management of equity assets is to do a good job in stop loss management of fund products. Using fixed investment to diversify the opportunity cost of investing in fund products can also reduce the risk of buying fund products.
Significance of fund stop loss and profit.
It is of great significance to stop loss and take profit of funds. In fact, whether it is a fund, stock or other fund investment, it is necessary to set a stop loss and take profit. The main significance of taking profit is to recover the income in time after investors get the income, so that the investment income becomes the real income in investors' pockets. Stop loss is even more important. When the fund falls and there is a downward trend in the later period, investors should stop the loss in time and transfer the funds out to avoid the loss from expanding.