Generally speaking, a fund is a financial product that collects the funds of investors in society and then gives them to professional fund managers for management and investment. So is the fund suitable for day trading? What are the disadvantages?

Is the fund suitable for day trading?

Not suitable.

Funds are more suitable for long-term holding. First of all, the fluctuation of the fund is small and the probability of daily trading income is small. Secondly, the redemption fees of many funds will decrease with the increase of time, and even some funds can be exempted from redemption fees for a long time. Finally, the fund invests in a basket of stocks, and in the long run, it is easier to get income. To sum up, this kind of income is relatively stable, and the wealth management products with small fluctuations are best held for a long time, and the income will be considerable.

What are the disadvantages?

1, increasing transaction costs

There are certain handling fees for fund trading, such as subscription fee and redemption fee. The subscription fee is related to the transaction amount, and the higher the transaction amount, the lower the rate. Mainly the redemption fee, which is related to the holding time. The longer the holding time, the lower the redemption fee, which may even be 0. If the fund is held for less than 7 days, the redemption fee is very high, usually not less than 1.5%. Therefore, short-term intraday trading will only increase transaction costs. And there may be a case where the handling fee is higher than the income, then it is a loss.

2, easy to chase up and kill down

Chasing up and killing down means that some investors immediately choose to buy when they see the fund rise; And if the fund you already hold falls, you will immediately choose to sell it. This violates the principle of high throwing and low sucking, which will make the investment cost higher and higher, and may eventually lead to losses.