Everyone says that the fixed investment is good, so what is the principle of the fund's fixed investment?
Some people say that the principle is to keep buying in batches to reduce costs, and then you can make money when it goes up. This statement sounds reasonable, but in fact, the role of the fund's fixed investment itself is not to make money, and there is no guarantee that it will make money. It is just a method and tool, and we need to use it well to truly become a sharp weapon for our investment.
The real principle of fixed investment of funds is to make the return curve of funds closer to the macro-economic trend and smoother through fixed investment on a regular basis and buying funds in small quantities. The meaning behind this sentence, in fact, the reason why we can make money from the fixed investment fund is because the macro economy is good, GDP has increased, the performance of listed companies has increased, the stock market has improved, and our funds will naturally rise. But in real life, macroeconomics and stock market do not seem to be so closely related. Sometimes when the economic situation is good, the stock market keeps falling, and when the economic situation is bad, the stock market suddenly rises.
In the short run, it is really difficult to see the relationship between the stock market and the macro economy, but in the long run, we can see the doorway. If we compare macroeconomics or GDP to a dog walker, then the stock market is compared to a dog. The dog walker walks forward step by step, which is more stable. But the dog rushed to the front like crazy for a while, looked back at his master, found that he had run too far and ran back. Sometimes I stare at the new one and can't forget it. Seeing that the master had gone away, I caught up with him. As long as the observation period is long enough, we can find that the dog always moves back and forth around the position of the dog walker. The stock market always fluctuates around the performance of the macro economy. The stock market moves like a dog jumping up and down. The more emerging markets, the more irrational investors are, and the more intense this fluctuation will be. Therefore, funds bought at one time are faced with great uncertainty, and it is difficult for us to determine whether the dogs in the stock market run in front of or behind their owners. Therefore, the role of the fund's fixed investment comes. Through continuous small subscription, the fluctuation of the fund will not be so great, the overall trend will be more stable, closer to the macroeconomic trend, our income curve will be smoother and the investment risk will be lower.
Knowing this, we can know that only by choosing the right time to enter the market can the fund's fixed investment play a greater role.