When there is a correction in the market, funds will also retreat, so many investors' funds have suffered losses. What should I do if the fund loses money? The following is what Bian Xiao collected when we needed to pay the fund. Let's have a look!
When do we need supplementary funds?
Market environment and fund performance: when the market is at a low point or the net value of the fund drops a lot, it may be an opportunity to make up the position. At this time, we can consider the concept of value-based investment, that is, the fund valuation is low and there is a large room for growth in the future.
Long-term investment goal: The decision to make up the position should be consistent with your long-term investment goal and risk tolerance. If you believe in the long-term potential of the fund and have enough funds to invest, you can consider appropriately supplementing the fund share.
Risk-return characteristics of funds: Understand the risk-return characteristics of funds, including historical performance, volatility, asset allocation, etc. To judge whether the fund is suitable for covering positions, you need to consider the risks you are willing to bear and the expected returns.
Capital planning and risk diversification: We should consider our own capital planning and risk diversification strategy before deciding to make up positions. Don't concentrate all your funds on one fund, but choose multiple funds to allocate according to your own situation and investment objectives.
What are the precautions for the fund to cover the position?
Familiar with the fund's purchase restriction policy: some funds may have limited purchases or other purchases, and it is necessary to know the subscription conditions and relevant regulations of the fund.
Consider the cost impact: covering positions will generate certain transaction costs, such as subscription fees and redemption fees. When covering positions, we should fully consider the impact of these expenses on income.
Prevention of excessive covering positions: When covering positions, we should pay attention to avoiding over-concentrated investment in a certain fund, and make appropriate covering positions according to our own capital planning and risk tolerance to spread risks.
Prudent evaluation of fund prospects: Before covering positions, carefully evaluate the prospects and risks of the fund, understand the investment strategy and past performance of the fund manager, and comprehensively consider the overall risk-return characteristics of the fund.
What if the fund loses money?
1. Switch fund mode
In order to meet the needs of different investment users, the same fund company will launch different types of funds according to the level of risk, and support business conversion between different funds. Therefore, if fund A loses money and feels that the risk of loss is high, it can consider switching to a low-risk fund.
2. Make up the position at the right time
If the investment fund is currently in a loss state, but there is a tendency to turn over in the future, it is best to cover the position at this low level and increase the investment amount. This method tests investors' vision and judgment, and is suitable for fund products with excellent historical performance and good operation.
3. Stop loss in time
Timely stop-loss method requires investors to set a stop-loss position, that is, when the fund loses money to the stop-loss position, it must sell decisively, switch to other funds or wait and see for the opportunity to buy again.
What should I do if the fund has lost a lot recently?
First, stop loss in time: stop loss is forward if the direction is wrong.
It is said that the fund takes profit and does not stop loss. Is that so? In fact, there are a series of preconditions for this statement, such as the fund that suits you, the optimistic prospect, and the fund itself. If any of the above three points are not satisfied, you can stop the loss in time. After all, stopping in the wrong direction means moving forward.
1, which is beyond your risk tolerance.
In fact, before buying a fund, everyone should think clearly about this problem. For example, the maximum loss you can bear is 40%, so when the fund falls by more than 40%, it is recommended to sell the fund in time or replace it with a stable fund.
Because different funds have different risks. If you buy a fund that is not suitable for your own situation and risk tolerance, then the fluctuation of the fund will definitely affect your normal life and investment mood.
The first step of any investment and financial management is to invest within your own risk tolerance. If you exceed your risk tolerance, to put it bluntly, 100% will not have a good end.
If your fund position exceeds your risk appetite, and it is a heavy position, even in Man Cang. Or holding dozens of funds without planning, it is better to cut meat and adjust positions early. Because when the market adjusts, you can't afford such a big adjustment. For example, you can only accept the adjustment of 10%, but your position is too radical. Because you didn't stop the loss in time, you may adjust it by 20% or more in a few days. Even more frightening is that this adjustment may not be over yet. Even if this round of adjustment is over, there will be more fierce ones behind, which will be thrown out sooner or later. It's better to get out early than to expect more losses. So do friends who hold dozens of funds. They are full of joy when they go up, but when they adjust, you will find it difficult to make up the position. With so much money, it is impossible to make up the position. After a few times, they will lose more.
2, extremely optimistic about the market outlook.
A major prerequisite for the fund to make money is to be optimistic about the stock market trend for a long time. Although funds can cross bulls and bears, the bear market falls less and the bull market rises more, but the overall trend is still similar to the broader market.
If the market is adjusted for a long time or there is no market, then the fund is likely to make no money or even lose money. So if you are bearish on the stock market for a long time, then the fund also needs to stop loss. Of course, no one can accurately judge the market trend. We only objectively analyze the overall operation strategy of fund positions from the perspective of ordinary fund investors. If you are pessimistic about the market outlook for a long time, then the stop loss operation at any time is correct, and the sooner the better.
Of course, for many experts, most of them think that what falls is a golden pit, and those with high returns dare to suck low, because the profit mechanism of the fund is to suck low and throw high, but only if they can hold it and see the multi-stage market.
3. Performance can't win the market for a long time.
No fund manager can outperform the market at every stage. A-share market is relatively good. It is normal for funds with partial debts and low stock positions to underperform the broader market. For industry theme funds or funds with distinctive styles, if they are not at the forefront, they will underperform the market. However, it has underperformed the broader market for three or four consecutive quarters, especially when the market style turns to the fund position style, and there is still no excess return. Such funds should be held carefully.
In addition, when the fund scale reaches the "ceiling" determined by investment strategy and investment ability, the continuous expansion of the scale may lead to the failure of strategy and mediocre performance, and it may be difficult to meet the high expectations of investors after buying.
Faced with these situations, it is better to sell them as soon as possible and convert them into funds with excellent historical performance and relatively stable performance, or simple and transparent index funds. Don't wait until the mud is deep. The more you lose, the more reluctant you are to come out.
Second, make up positions: make a good budget for making up positions and make a reasonable plan for making up positions.
Buffett has a famous saying: others are afraid that I am greedy. Many small partners will choose to make up their positions in the decline, making up less and making up more. There is no problem with this theory, but the reality is that most people have limited cash flow. In the long-term shock callback, it is easy to fall into the embarrassing situation of "I copy me, I copy me, and I also copy bullets". Jobs said, "Living is to change the world". But the first point is "live first".
No one can predict when the sun will rise again, so it is particularly important to make a good budget and make a reasonable plan to cover the position.
Filling position method
Prepare for 1-2 years for each replenishment. The next step is how to make a plan to cover the position.
You can add positions in a fixed proportion and strictly enforce discipline. Or according to the pyramid method, when the fund falls, with the decline of the net value, the position of each additional position is gradually increased, thus reducing the average investment cost.
For example, if the current net value of Fund A is 1.2 yuan, and the range of increasing positions we set is lightening positions 10%, then we will increase positions 1 1,000 yuan; When the net value drops by 20% to 0.96 yuan, add another 2,000 yuan; If the market outlook continues to fall, then add 3000 yuan until the net value rises.
With the decline of net worth, this method is a test for investors' cash flow. If the cash flow is sufficient, the cost of holding positions can be minimized.