Asset allocation means that investors allocate funds to different assets according to their own investment objectives, risk preferences and other factors. So why asset allocation? How does the fund diversify its investments? Xi Caijun also prepared relevant contents for your reference.

why asset allocation?

the main purpose of asset allocation is to realize the long-term wealth appreciation and preservation of investors. Through asset allocation, investors can choose their own investment strategies according to their own needs and risk tolerance, and avoid concentrating their funds on a few wealth management products, thus reducing the impact of specific risks on investment returns. In addition, through the decentralized allocation of assets, investors can also seize more opportunities to improve the investment efficiency and yield of funds.

how do funds diversify their investments?

1. Choose the appropriate fund type according to your risk preference and income target. Generally speaking, stock funds are risky, and their income potential and fluctuation are also great, while the income of money funds and bond funds is relatively more stable, so investors can diversify their capital into different types of funds.

2. Pay attention to the investment portfolio and performance of the fund. Investors should know the fund's investment strategy, positions, risk control, income withdrawal and other information, and compare with similar funds to choose excellent fund products and fund managers. In addition, investors should also pay attention to the fund's dividend situation, analyze the fund's income performance and risk status, and adjust their own positions in time.

3. adopt the fixed investment strategy of the fund. The net value of funds is influenced by market conditions, and the changes in the market are often difficult to predict. Investors can adopt the strategy of fixed investment to diversify their investments, so as to share the cost of funds, reduce the impact of short-term market fluctuations and obtain more stable returns.