First of all, it is clear that fund investment can only use idle money, not just funds, but all investments. When we start to have spare money, we can make a good plan.
Fund investment also has risks in the short term, such as stock funds, and the risks can be compared with stocks. If all the money is put in at once, and when the money is urgently needed, it may be redeemed just when the market situation is very bad, then it will be a big loss. In order to avoid this situation, we must calculate the size of the purchase fund.
There is a very simple method called "one third method". One third of the money is spent on fixed assets such as real estate, one third is invested, and the remaining one third is saved. This method originated more than 2000 years ago, but it still applies today.
There is also a method called "finger algorithm", which needs to be calculated according to your age. Subtract your age from 100 to get the proportion of assets available for various investments. For example, if you are 30 years old now, the proportion of assets you can invest cannot exceed 70%, and the proportion of assets we can invest will decrease with age.
Although the average annualized return of the fund market is about 12%, it is the average of a long investment cycle, not the inevitable return every year.
Rational allocation of assets helps us to face the market calmly and profit and loss rationally.