When the fund makes a fixed investment, many people often have such a dream. As long as they invest a little money every month, they can quadruple it in a few years. Many people think that financial freedom can be achieved by making a silly investment, but the reality is that most people spend too much money on funds.

I have to admit that for ordinary people, the fixed investment of the fund is indeed a good investment tool, but one thing cannot be ignored. Although there are many successful examples, there are not as many people who make money from the fixed investment of the fund as expected. Most people leave halfway, and the fixed investment based on income often ignores the risk, duration and risk tolerance of fixed investment.

The fixed investment of the fund itself is not perfect, but also has its own defects, such as;

1. It is difficult for the fund to spread systemic risks. Just like you go to the vegetable market to buy cabbage for the winter, you worry that the price will be different every day, so you buy some first, but if the cabbage is rotten, this winter will be difficult. Therefore, the target of our fixed investment must be an asset that will be bullish for a long time.

For example, China's economy is improving for a long time, and it is correct to invest in stock funds to share the dividends of economic growth. On the contrary, the proportion of clean energy will gradually increase in the future, so oil is not suitable as the target of long-term investment.

2. The fixed investment of the fund can only play the role of dispersing stock price fluctuations in the initial stage. With the accumulation of fixed investment, the pulling effect of each new investment on the total cost will become smaller and smaller. In the long run, the fixed investment of the fund is invalid in sharing the cost, so we must establish our own appropriate exit strategy. Usually 20% to 30% is a reasonable profit-taking point.

3. The fixed investment of the fund has corresponding opportunity cost. As a means of saving money at one time, fixed investment is very good and suitable for wage earners, but it is not cost-effective to make fixed investment with a large sum of money. Through the low correlation between various assets, it is more appropriate to reduce the fluctuation of the overall portfolio by means of fund allocation.

Any strategy has advantages and disadvantages, and no strategy is omnipotent.