Funds must have a formula: don't buy heavy stock funds with major problems.
If there is a major problem with the heavy stocks of the stock fund, if the heavy stocks of the stock fund fall, then the stock fund will also fall. Therefore, when buying equity funds, we need to pay attention to their awkward positions and choose promising awkward positions. Only when the heavy stocks rise, the stock fund will rise, because the heavy stocks are the investment targets of the stock fund, which determines the rise and fall of the stock fund.
The fund's basic formula 2: Underestimate buying and overestimate selling.
When the fund is undervalued, the net value of the fund is relatively low, the possibility of the fund rising is relatively large, and the profit space is relatively large. However, if the fund is overvalued, it means that the bubble is relatively large and the fund is likely to fall, so it is generally necessary to consider selling, but this also depends on the situation.
Funds must have formula 3: the number of funds is small, but there is no problem.
When buying funds, many investors think that they should not put them in one basket, which can spread risks, so they will buy many funds, and some may buy more than a dozen. In fact, when they bought the fund, the number was small, but they were fine. If they buy too many funds, they will distract themselves to some extent.
Secondly, some funds are of the same type or sector, but in fact their risks are not dispersed. For example, stock funds all invest in stocks, so if the heavy stocks of the two stock funds are the same, the risks are concentrated, but the risks are not dispersed.
Formula 4: It is very important to make a good allocation of funds.
When purchasing funds, you can allocate different types of funds according to your own situation. For example, the risks of money funds and pure debt funds are relatively small, while the risks of stock funds, hybrid funds and index funds are relatively large. Therefore, when matching, it is ok to use money fund+equity fund, pure debt fund+hybrid fund, and money fund+pure debt fund, which can reduce both risks and risks.