Especially in an emerging market with great volatility, such as China stock market, the stock price is prone to ups and downs. If it fails to appear at the market high point in time, long-term holding may not be as good as band operation. The same is true of funds. If they fail to make profits in time, after a period of time, the trend will change and the income will be greatly reduced; Those who intervene at a high point, if they can't get out in time, will be trapped and can't move. Therefore, it is necessary to set a suitable stop loss/profit point.
The easiest way to set and execute stop-loss points and take-profit points is to find out the profit and stop-loss intervals that are most suitable for your portfolio by measuring your investment attributes according to the performance of the historical band of the stock market. Therefore, if the general stock fund investors choose a fund with fairly stable long-term performance, as long as they master the long-term band performance, they can take the band period and fluctuation range of the stock as one of the reference bases for setting profit points and stop-loss points.
When setting stop loss/profit point, you also need to consider your risk tolerance and acceptable investment period. Due to the different attributes of different funds, the scope of setting should be adjusted accordingly. For example, funds with high volatility should have more room for decline and can expect higher returns. At this time, you can set the stop loss/profit point to a greater extent. Funds with relatively conservative operating strategies should not set too high profit expectations. After the stop-loss point is set, it is necessary to observe the change of portfolio income regularly in order to grasp and adjust the opportunity.
It should be noted that when the fund's income reaches its stop loss/profit point, it does not need to stop profit or sell immediately. It is necessary to evaluate whether the long-term market trend is still optimistic, whether the fund is operating in the right direction, and whether the early warning conditions set by itself are in line with the market situation at that time, and then decide how to adjust the investment portfolio.
If the performance of the fund is still better than that of the same type of products, and the long-term prospects of the underlying market are promising, and you can tolerate the risk of continuing to hold it just because of short-term fluctuations, then you can consider setting up early warning conditions again, or even taking the opportunity to overweight against the trend to achieve the goal of leveling the bargain.
In addition, it should be reminded that the stop loss/profit condition is not suitable for the fixed investment strategy, because the fixed investment is for the long-term financial goals, and the stop loss can not be deducted at will because of market fluctuations. Investors should decide when to stop their fixed investment according to their financial goals.