In stock trading, a trading system that suits you and adapts to the market is really crucial, so what basic investment knowledge do you need to know as a novice stock trader? The following is the introduction knowledge of investment funds for your reference. Let's have a look!
Introduction to fund investment
When you start investing in funds, the following are some basic introductory knowledge that can help you better understand and invest in funds:
What is a fund? Fund is a collective investment tool composed of multiple investors. Fund companies pool these funds, which are then managed and invested by professional fund managers.
Types of funds: Funds can be divided into many different types, including stock funds, bond funds, hybrid funds and money market funds. Each type of fund has different investment strategies and risk levels.
Risk and return: Investment funds involve risk and return. Different types of funds may have different risk levels and expected returns. Generally speaking, the higher the risk, the higher the potential return.
Fund manager: A fund manager is a professional who is responsible for managing fund funds. They are responsible for making investment decisions, choosing appropriate portfolios and trading according to the investment objectives of the fund.
Net value and unit net value: the net value of a fund is the balance of fund assets MINUS liabilities. The net unit value is the net assets of the fund divided by the total shares issued by the fund, which can reflect the value of each share.
Front-end and back-end expenses: Fund investment may involve some expenses. The front-end fee is the fee paid when purchasing the fund, and the back-end fee is the fee paid when redeeming the fund. Understanding the fund's expense structure is very important for investment decision.
Capital investment and redemption: you can invest money to buy fund shares and redeem them when necessary. Different funds may have different minimum investment and redemption restrictions.
Profits and dividends: the profits of a fund usually show the growth of the fund's net value. In addition, some foundations pay dividends regularly and return some profits to investors in the form of cash or reinvestment.
Monitoring and evaluation: As an investor, you should regularly monitor and evaluate your portfolio to ensure that it meets your goals and risk tolerance.
The above are some introductory knowledge of fund investment. For further study and understanding, I suggest you read relevant investment books, consult professionals or attend investment training courses.
What are the precautions for investment funds?
Objectives and risk tolerance: Before investing, you must be clear about your investment objectives and risk tolerance. Different types of funds have different risk levels and expected returns. Knowing your goals and risk tolerance will help you choose the right fund type.
Research Fund: When choosing a fund, it is very important to conduct appropriate research. Read the relevant documents of the Fund carefully, such as the prospectus, risk disclosure and the latest annual report of the Fund. Understand the investment strategy, management team and past performance of the fund.
Diversified investment: Diversified investment is an effective way to reduce risks. Don't put all your money into a single fund or a single asset class. Instead, consider investing in different types of funds, such as stock funds, bond funds, overseas funds, and funds in different industries and regions.
Pay attention to expenses: the fund has various expenses, including management fees, sales fees and other expenses. These expenses may have a significant impact on your return. Compare the expenses of different funds and choose the fund with reasonable and transparent expenses.
Long-term investment: fund investment is a long-term investment method. Don't try to make a quick profit by short-term trading. I believe in long-term stable market growth and give my investment enough time.
Re-evaluate regularly: Re-evaluate your portfolio regularly to ensure that it is consistent with your goals. Over time, your risk tolerance and goals may change, so you need to evaluate and adjust them regularly.
Remember, investment is risky, and past performance does not represent future performance. If you are uncertain about the fund investment, you can consider seeking the advice of a professional financial advisor.
investment objective
The goal of fund investment is to provide investors with long-term stable capital gains or fixed dividend income, and so on.
The goals of the fund should be consistent with the investors' own goals. If the fund's goals change after a period of time, you need to re-evaluate your investment.
If you focus on growth, your goal is to increase the value of the fund in a long period of time; If you focus on income, your goal is to get a reliable income stream from your investment; If you emphasize stability, your goal is to ensure the safety and reliability of investment. No investment can achieve the above three goals at the same time. Some funds emphasize one goal; The rest distribute priority weights among multiple targets; Others will try to strike a balance between several different goals.
According to the current regulations, the investment objectives of each fund are detailed in the fund contract and prospectus (prospectus).
Investment scope
The fund contract and prospectus (referred to as prospectus) will describe the range of securities that the fund may purchase, the target of fund investment, how to choose the fund, the types of securities that the fund focuses on purchasing and how to operate in actual operation.
For example, financial instruments with good liquidity include domestic stocks, bonds and other financial instruments that China Securities Regulatory Commission allows the fund to invest. Among them, the stocks issued by listed companies are the focus of investment. What kind of securities or listed companies are the main targets of fund investment, such as stocks of listed companies with excellent investment performance and stable growth and stocks of listed companies with great growth potential.
Investment philosophy
The investment philosophy of the Fund is to focus on long-term investment or be proactive. From the perspective of foreign mature markets, the investment concept of funds has always been the embodiment of the investment wisdom of fund managers, and it is also an important prerequisite and foundation for the success of fund investment. It is of great significance to make a comparative analysis of fund investment concepts.
Different types of funds have different investment ideas and styles, and their pursuit of investment income and risk control are also different. The judgment and identification of fund types is helpful for investors to invest in funds suitable for their risk preferences and income objectives. Of course, because the investment concept of the fund is an abstract concept, it is difficult to make an objective comparison without a long test.