Index fund is the most popular fund among all kinds of financial advisors, because it has the widest adaptability. Aggressive investors can balance the risks in investment by investing in index funds, while prudent investors can match their own risk-return characteristics by investing in index funds. Index funds can also meet the needs of various investment purposes or asset planning, especially long-term asset planning. Moreover, the professional requirements for investors are relatively low.
In addition to these familiar advantages, what are the characteristics of index funds themselves?
Keep pace with the national economic development.
Some people say that investing in index funds means investing in national luck. As long as the country exists and the economy develops, index funds will certainly make money. The index can be roughly divided into broad index and industry index. Needless to say, the broad-based index will grow when the economy is developing and the market is improving, and the long-term economy will definitely develop upwards. Therefore, investment index foundations are profitable for a long time, as are various industry indexes.
High quality sustainability
Buying an index fund is equivalent to buying a basket of stocks under the index. A company may go bankrupt, the stock may be delisted, and all good companies under an index will go bankrupt. This possibility is almost nonexistent.
The characteristic of index funds is never to withdraw from the market and never to step on thunder. Because you buy many stocks at the same time, and they are good stocks selected from many stocks, even if some of them have unexpected black swan events, the impact on the index is not great; Indexes will be compiled regularly according to the compilation rules, and unqualified stocks will be eliminated and new qualified stocks will be included. Index funds will also survive the fittest, adjust positions regularly, keep the good ones and eliminate the bad ones. So the index has been there, and individual stocks are not often there. Investment index funds will never be delisted.
Long-term upward trend
Years of historical experience has proved that no matter how big the economic crisis and market fluctuation are, the long-term market trend must be upward, so long-term investment in index funds will definitely make money. Whether the index can finally rise depends on whether the listed company behind the index fund can make a profit. China's economy is in the transition stage of rapid development, and its economic growth rate ranks among the top in the world. Although various problems will be encountered in the process of transformation, new industry opportunities will appear every once in a while to promote economic development.
Although the stock price is affected by various aspects, sometimes it may not immediately reflect the company's profitability, but the final price will return to value. Therefore, the premise of long-term profit of index funds is time.
Buying an index means buying national wealth. As long as our country is strong and stable, and the company's profits increase, our index funds will certainly make money. This is our confidence in investing in index funds.