How did the biggest retreat come from? How is it calculated?
Maximum retracement refers to any high point retracement in the selected time period. When the net value of a fund falls to the lowest value in this time period, the middle fluctuation range. For example, in a month, the periodic high point of a fund's net worth is 1.8, and the lowest point is 1.2, from 1.8 to 1.8.
Different types of funds have different maximum retracement data intervals. For example, index funds have low risks and low returns, while stock funds have high risk factors and high overall returns.
If you can only tolerate losses within 5%, that is, the maximum retracement data is 5%, then it is recommended to invest in money funds or bond funds, and at the same time be able to accept the annualized income level of 2% to 5%.
If you expect a higher rate of return and can tolerate a maximum retracement of more than 30%, then you can choose stock funds, stock funds, partial stock mixed funds, flexible allocation funds and so on.
Any investment and financial management tool is a tool to serve investors, and investors need to choose according to their actual situation. The more experienced investors are, the more accurately they can judge their investment ability and know how to balance risks and benefits.
Of course, if it is the same kind of fund with the same investment strategy and the same income level, it is of course to choose the fund with the largest withdrawal and smaller scale.