Funds are very similar to stocks. Generally, you have to buy low and sell high to make money. Buying on dips is a skill that needs thinking and analysis. So how does the fund buy on dips? What are the skills? I have prepared relevant contents for your reference.

How do funds buy on dips?

For example, suppose a fund bought 200 yuan when the net value of the fund fell by more than 1 point, and continued to buy 200 yuan the next day, regardless of the increase or slight decrease, and then added an extra 2,000 yuan when the total return rate fell by 5%, but this method can only be considered when the fund's prospects are optimistic.

If you choose a bad fund, you will only lose more and more, so you should be optimistic about the development of that fund before buying on dips. If it is a fund with no development prospects, don't go further and further on the wrong road.

What skills does the fund have to buy on dips?

1, depending on the valuation of the fund index

This is a relatively important reference indicator, usually looking at the valuation of the Shanghai and Shenzhen 300 or Shanghai Composite Index to understand the overall situation of the market. When the percentile of valuation is above 80%, it is relatively overvalued, and when the percentile is below 20%, it is an underestimation interval. The method of judging positions according to valuation is more suitable for index funds and funds in some cyclical industries.

2. Look at the return of funds.

Historical retracement of reference funds. Retreat is the fluctuation of fund net value between the highest point and the lowest point in a period of time. Generally speaking, the maximum withdrawal rate of 3-5 years is of certain reference value. It is also worth noting that adding positions on dips does not mean adding positions as long as they fall, but adding positions appropriately for analysis, otherwise it is easy to add funds to heavy positions and affect their asset allocation.