There is a misunderstanding that many people buy funds, that is, they buy whatever they see with high returns. But in fact, those funds with high returns are mostly high-risk funds. Although buying them has the opportunity to get high returns, they are also easy to lose money. Then, if you buy a fund and lose money, if you don't sell it all the time, will it rise? Is it possible to lose all the principal? Can a fund that has fallen rise if it has been held all the time?

to answer this question, we must first know why a fund has fallen. There are two main reasons why the fund will fall, one is that the fund manager is not good, and the other is that the market is not good. If it is an active fund, it is related to both reasons. If it is a passive fund, it is basically only related to the market. The fund manager of a fund, no matter how bad it is, will not be much worse. Otherwise, which fund company dares to use him/her as a fund manager? If a mediocre fund manager discredits him, how can he sell his own fund?

So even if the fund manager's ability is not good, there is a high probability that he can make money when he meets a good market. But if the market is bad, the loss is almost certain. For the funds managed by this part of fund managers, it is mainly to rely on the weather to eat, including passive funds with low requirements for ability. At this time, after the fund has fallen, whether it can go up all the time depends mainly on whether the market invested by the fund can be followed up.

An excellent fund manager can almost certainly make money when the market is good, but when the market is bad, he will probably lose money. Because even active fund managers can't choose short positions when the market is bad like retail investors, but they must keep a minimum position, so they can only passively bear the market decline. For these funds managed by fund managers, the decline is basically caused by the failure of the market. However, whether the fund that has fallen can rise back is relatively less dependent on the market getting better.

Since most markets will not only fall but not rise, most funds should have the opportunity to rise again after falling, regardless of the ability of fund managers. The difference is that some funds were just established at the high point of the market, and even if they rose later, they failed to return to the original high point. At this time, funds managed by excellent fund managers can still rise back after falling, while funds managed by incompetent fund managers are even more difficult to rise back after falling.

Of course, although most funds have been held after falling, they can rise back, provided that the funds will not be liquidated during this period, and once they are liquidated, there is no hope. Then, if a fund is liquidated, or has been falling without liquidation, will it lose all its principal? Will the fund lose all its principal if it keeps falling?

theoretically, it is possible to lose all the principal if the fund keeps falling, but it is impossible in practice. First of all, the liquidation of the fund is not to clear the net value of the fund, but to return the remaining assets of the fund to investors. Because when the size or number of holders of a fund is less than a certain number, the liquidation conditions will be triggered, and it is not necessary for the net value of the fund to fall to zero before liquidation.

Secondly, even if the fund is not liquidated and keeps falling, the net value can't fall to zero, because it needs to make all the assets invested by the fund become zero, which is almost impossible. Therefore, even if the fund loses money again, it is impossible to lose the principal.