2. Changes in market prices: No matter what you invest, the investment target is the most basic influencing factor. When the market price of the investment target fluctuates greatly, it will affect the fund's income and even cause losses.
Third, the influence of policy factors: investors need to pay attention to the update and change of market policies at all times. The introduction of a policy will cause many chain reactions, or major events, which need to be focused on.
The income sources of financial assets such as stocks are mainly divided into two aspects: one is beta income, which fluctuates with the market; The second is alpha income, which does not fluctuate with the market.
1. beta income (market income)
We can regard beta income as a passive investment income, which represents the average market income obtained by taking market risks.
Beta income is relatively easy to obtain, for example, by allocating index funds, beta income can be obtained, so as to keep up with the rhythm of the market.
For ordinary investors, if they only want to get the average return of the market, they can allocate broad-based index funds to keep up with the pace of the market.
The operation of index funds does not depend on the fund manager's stock selection ability, and the rate is relatively low, and the position is generally above 90%. When the market falls, they will not take the initiative to reduce their positions.
2. Alpha return (excess return)
Alpha income is the difference between the actual income of the fund and the beta income, and the beta income is the part where the investment income exceeds the market income.
Alpha income mainly depends on the active management ability of fund managers, which requires high ability of fund managers in stock selection and timing.
If the performance of a certain fund greatly exceeds the market average, it shows that the investment management ability of the fund manager in this period is more prominent.
If you want to get excess returns beyond the market, you need to choose some excellent active management funds.
For these funds, the stronger their ability to surpass the benchmark index, the greater their alpha income contribution.
Therefore, when choosing actively managed funds, we can take the data beyond the benchmark as an important reference.
Generally speaking, index funds are more radical in unilateral or general rising market; In a volatile or structural market, actively managed funds with obvious returns are more likely to break through. You can choose according to your risk tolerance and investment preference.
Then we know the source of the fund's money, and why the fund makes money and we don't, which is related to the amount and operation of our own investment. Some funds look at historical trends and have good returns. However, if they invest in historical returns, they may buy at a high point. If their performance deteriorates, they will lose money.