A fund in a broad sense refers to a certain amount of funds set up for a certain purpose. I believe everyone wants to know the important knowledge of the fund. How to deal with the fund collapse? The following are the consequences of the decline of funds organized by Bian Xiao. Welcome to reading.
What will happen if the fund falls?
Asset impairment: When the fund falls, the net value of fund shares will decrease, and the investment amount of investors will also be impaired. This means that your investment principal may be reduced.
Loss of return on investment: the decline of the fund will lead to the loss of return on investment. If you buy at the high point of the fund and sell it when it falls, it may lead to losses.
Emotional influence: the decline of the fund may trigger investors' emotional fluctuations, such as panic, anxiety and fear. This may lead investors to make emotional decisions, such as buying or selling too much, thus aggravating losses.
Dynamic balance impact: the decline of the fund may affect the dynamic balance of the portfolio. If some assets do not perform well, they may need to be adjusted to restore balance, which may bring certain transaction costs.
Important skills of operating funds
Investment goal and time: determine your investment goal and time period. This can help you choose the right fund type and risk tolerance, and make investment strategies according to your own goals.
Diversification: Reduce risks by diversifying investments between different types of assets and regions. Diversification helps to balance the risk of portfolio and reduce the impact of specific assets or markets.
Regular evaluation and adjustment: regularly evaluate the performance of the fund and make appropriate adjustments according to the market environment and investment objectives. This enables you to keep control of your portfolio and respond to market changes in a timely manner.
Long-term investment: Long-term investment can smooth market fluctuations and improve the return potential. Long-term investment helps to avoid the interference of short-term market fluctuations on investment decisions and capture the long-term growth trend of the market.
Careful selection of fund managers and funds: select fund managers with good business performance and consistency, and carefully evaluate the investment strategy and risk management ability of funds. Understand the investment portfolio, fee structure and historical performance of the fund to make wise choices.
Controlling emotions: Controlling emotions is very important in investment. Avoiding emotion-driven investment decisions can help you avoid making wrong decisions due to market fluctuations.
Reasons for the fund's sharp fall
1, affected by market conditions.
Most equity funds invest in stocks, so when the stock market plummets, the possibility of the fund plummeting is very high. Therefore, when buying a fund, you can look at which stocks the fund mainly holds heavily, and then see if the stocks you invest in have future prospects.
2. Overpricing
Generally, when the fund continues to rise for a period of time and the fund valuation is high, the possibility of decline is relatively large, because the fund valuation is to estimate the assets and liabilities of the fund according to a certain price. If the fund is overvalued, the risk is greater and the possibility of fund collapse is greater.
3. Encounter unexpected events with great impact.
The investment of the fund depends on entering the market. If the financial market has a relatively large impact of emergencies, it will also directly affect the fund. For example, the financial market will lead to a sharp drop in the stock market, which will affect the fund.
When the fund plummets, it is necessary to judge whether there is a possibility of rising behind the fund. If you are optimistic and feel that there is a possibility of rising, you can actually spread the risk through the fixed investment of the fund, then hold it for a long time, and then sell it to make money when the fund rises.
Can the fund still be bought now?
First of all, if it is the first reason for the fund's plunge, whether the fund can buy mainly depends on whether the stocks allocated by these funds have fallen to a reasonable valuation area.
The listed companies behind the stocks that the fund can buy are certainly not too bad, and may even be the best in all walks of life. These companies have little risk of bankruptcy and great room for growth, so it is no problem to hold their stocks for a long time.
The only question is whether the current stock valuation is the first choice. Because the premise is too high, although it has fallen a lot, it may not have fallen to a reasonable valuation area. But if it has reached a reasonable valuation area, funds holding these stocks can buy them.
Of course, even if these stocks have not fallen to a reasonable valuation area, there is still a chance to make money by buying funds with these stocks now, as long as they are held for a long time. Because the valuation of the stock will change with the growth of the company, as long as the company continues to grow in the future, the current high valuation may appear relatively low in the future.
What are the ways to deal with the collapse of funds?
1. Profitable funds will lighten their positions first. In fact, the market is not as bad as we thought. Although the market has plummeted, there are still rising funds. For example, science and technology rose sharply yesterday, and it happened that the science and technology fund held by a friend had already made a profit of about 50%. At this time, you can lower the position of the science and technology fund first. Reduced position ...
2. Buy some small funds to avoid risks. At this time, what funds are relatively stable must be fixed income+and bond funds. Although the income is only 5%- 10%
Loss is an important lesson in investment, you need to learn to face it with a correct attitude.
Indeed, everyone likes to make money and no one likes to lose money. Especially when they retreat, they will feel bored, "blue thin mushrooms." The core reason behind it lies in the "aversion to loss" of human nature, that is, the pain brought by 20% extraction far exceeds the happiness brought by 20% harvest. However, to recognize the fact, the loss in investment is inevitable, just like there will be winter in four seasons and night every day. So, "don't come here at the peak, and don't turn around and leave at the bottom."