Recently, many investors have discovered a strange phenomenon: the market index has gone up, but the funds they hold have fallen. What the hell is going on here? This paper will analyze the basic knowledge, market mechanism and investment strategy.
First, the basic knowledge
1. Market index: refers to the index representing the whole stock market or a certain sector. Usually composed of several blue chips, reflecting the trend of the whole market or plate.
2. Fund: A collective investment tool set up by multiple investors and managed and operated by a fund management company. The investment scope of the fund can be stocks, bonds, money markets, etc.
3. Index funds: The investment strategy is to track the returns of an index, such as the Shanghai and Shenzhen 300 Index and the CSI 500 Index.
Second, the market mechanism
1. Investor psychology
Everyone has different investment goals and risk tolerance, so different investors will react differently when the stock market rises. Some investors will increase their purchases, leading to a rise in the stock market; Some people will choose to sell it and seize the profit opportunity. There will be differences between buyers and sellers in the market, which will form a relationship between supply and demand, and then affect the stock price.
2. Market sentiment
Market sentiment is also an important factor in the rise and fall of the stock market. When the market is optimistic, investors often overestimate the stock price, leading to a bubble in the market; When the market is pessimistic, investors tend to underestimate the stock price, which leads to the market selling.
3. Market risk
There are certain risks in stock market investment itself, such as policy risk, economic risk and enterprise risk. When the market risk increases, investors will choose to sell stocks to protect their assets, which will lead to the stock market falling.
Third, investment strategy.
1. Fixed market investment
Fixed investment in the market is a long-term investment strategy. Investors regularly invest a certain amount of money every month to spread the risks brought by market fluctuations. When the market falls, you can increase your investment appropriately to get better returns.
investment diversification
Diversification is a risk control strategy. Investors can spread their funds to different funds or industries to reduce the risks brought by a single fund or industry.
3. Index funds
Index fund is a kind of fund that can track the market trend, and its income is similar to the market index. Investors can choose their own index funds to invest in order to obtain the average market income.
There are many reasons why the market index goes up and the fund goes down. Investors need to choose appropriate investment strategies according to their investment objectives and risk tolerance. In the market, investors need to make investment decisions according to market sentiment and risk conditions to avoid being affected by market fluctuations.