Is the fund volatility good or small?
Whether the fund volatility is good or small cannot be generalized. Generally speaking, the fund's volatility is measured by a certain period of time, such as several years, and it is meaningful to compare the same period of time.
1, fund of the same type
For example, if two bond funds with similar expected returns compare their fund volatility in the past year, the greater the volatility, the greater the risk, so investors can choose the fund with relatively small volatility.
2. Different types of funds
For different types of funds such as bond funds and stock funds, the volatility of stock funds is generally higher than that of most bond funds. Therefore, the risk level of equity funds is higher than that of bond funds, and there are more opportunities to obtain high returns after the market rebounds.
How to choose the two depends on investors' risk tolerance and personal investment preferences. If you have a strong risk tolerance and want to get a higher expected return on investment, then a stock fund with higher volatility is more suitable. On the contrary, it is safer to choose bond funds.
3. Fixed investment of the fund
The significance of fixed investment lies in diluting investment risks and costs through long-term investment. Therefore, the higher the volatility of the fund, the more prominent the value of fixed investment to reduce costs. On the contrary, funds with very low volatility, such as money funds, do not have much fixed investment value. Therefore, for the fixed investment of funds, it is best to choose funds with large fluctuations such as stock funds and hybrid funds.
The above content about whether the fund fluctuation is good or small, I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.