Although according to the normal state, the fund is on the rise. But even if they are all rising, the speed of different funds is different, not to mention the risk of falling. When the fund continues to rise to a certain point, we need to take profits in time, redeem the fund, invest in index funds with more potential, earn more income, and so on.
The take profit point is generally set at 15% ~25%. According to everyone's risk tolerance, the setting of take profit point is also different, which should be suitable for everyone. Beginners just entered the market, so it is suggested to set the profit-taking point at around 15%. After we have gained a few benefits and learned the rules of investing in index funds, we will put forward the profit-taking point. For people with strong risk tolerance, it is a good choice to set the profit-taking point at 20%. It should be noted that 25% is already a high profit-taking point for beginners, which we should be clear about. According to the characteristics of China stock market, it is a very wise choice to set profit-taking points, and the funds can be reinvested in other funds.
Where is the take profit point? We can log in to an app that can buy index funds at will, and when we enter the fund page, we will find the word position yield. This is where the take profit point is set. When the position yield reaches 20% (say, 20%), we can sell it.
Second, the maximum retreat point.
Suppose we set the maximum retreat point at 5% and the take profit point at 20%. There are two situations:
1. The fund we decided to invest in continued to rise to 15%, which did not reach the profit-taking point, but then it fell all the way and continued to fall to 10%. Be sure to sell at this time, because the percentage of decline has reached the maximum retracement point. Hurry up and sell, and you will get a profit of 10%; Don't be greedy and think that the fund will go up, but it may lose all its income.
The stock market has been alternating between bear market and bull market. When the bull market comes one day, we should also seize the bull market and earn more profits. Index funds continue to rise and have exceeded the take profit point. At this time, you can temporarily ignore the take profit point and watch the income gradually increase. Once the fund falls and reaches the maximum retracement point of 5%, we immediately choose to sell and collect the proceeds.
China stock market is a "short bull and long bear", whether it is a stock market crash or a bull market, it is an extreme situation. To set the take profit point and the maximum retracement point, strictly implement the rules after setting. No matter whether it is up or down after selling, you should feel at ease and invest in other funds with the returned funds. The short-term surge in income is just luck, and the long-term sustained and stable income is king, which can bring us a steady stream of funds.