The main purpose of financial management is to earn a certain expected income. Financial management has certain risks, not necessarily making money, but it may cause certain losses. So what is the underlying logic of bond funds? The following small series brings why there is a big retracement, I hope you like it.

1. What is the underlying logic of bond funds?

Bond fund refers to a fund with bonds as its main investment object, that is, fund companies gather people's idle funds to buy and sell bonds. Bonds include government bonds, financial bonds and corporate bonds. Different bonds have different risks and expected returns.

The expected return of national debt is relatively low, but the security is high. The expected return of financial bonds is moderate and the security is moderate. Corporate bonds have the highest expected returns and the highest risks. The risk of bonds mainly comes from the issuer's default risk and market risk.

There are two main sources of bond income, one is bond interest income, and the other is bond market transaction income. The interest income of bonds is relatively fixed. As long as the issuer does not default, there is basically no big risk.

The market transaction income of bonds is relatively unstable, and the market price of bonds is mainly affected by the relationship between supply and demand of bonds. If the demand for bonds is greater than the supply, the price of bonds will rise, if the demand for bonds is less than the supply. Then the price of bonds will fall.

If the market price of bonds falls, the assets of bondholders will depreciate, in other words, our bond fund may fall. The bond market also earns the price difference by buying low and selling high, so the rise and fall of bond funds has a great relationship with the management level of fund managers.

Second, why did you encounter a big retracement?

Why bond funds have retreated recently is why people's financial management has fallen sharply, mainly because banks are short of money. Recently, the demand for social funds has increased, and the funds used by banks to issue loans and reserves have decreased. Banks withdraw funds by selling bonds in large quantities, which will lead to an increase in bond supply and a decrease in bond prices.

On the other hand, when the bond price falls, it will cause some panic to investors, and investors will redeem their own funds. When there is a large redemption, people's financial management will further shrink. The more financial management falls, the more people stop, leading to such a vicious circle, and finally financial management retreats.

How to increase stock positions and dilute costs

First, the pyramid position management method. Investors continue to be optimistic about a stock and start buying a lot of money. In the process of stock rising, they gradually buy, and the proportion of buying gradually becomes smaller. In addition, investors continue to be optimistic about a stock, and gradually increase their positions when the stock price falls to reduce costs. The proportion of each increase is fixed.

Second, the funnel position management method. Investors continue to be bullish on a stock. When the stock price falls, the market will gradually increase its positions to reduce costs, and the proportion of each increase will become larger and larger. It should be noted that no matter which way investors increase their positions, they need to comprehensively consider their investment preferences and the amount of funds.