Dividend of liquor fund refers to the distribution of some fund income to fund investors in the form of cash. To put it simply, it is actually to take out a part of your fund net value and convert it into real cash for you. In this process, the fund share you hold will not change, and the net value will decrease, so how much dividends you get, the corresponding assets will also decrease. You can understand it this way, the fund dividend is to help you lighten your position first, and then add it back or drop it directly according to your needs. Among them, the dividend reinvestment is added back, and the cash dividend is directly pocketed, and there is no incremental income.

Reasons for dividends:

(1) From the fund company's point of view, the first point is that the position can be skillfully reduced. Generally speaking, public offering funds need to hold certain positions. Dividends can reduce positions under the circumstances stipulated by law. The second point is that it can reduce the net value of the fund and attract investors. Some investors usually choose lower net worth when buying funds, which is similar to choosing cheap stocks in our stock market, so dividends can reduce the net worth of funds.

(2) From the perspective of investors: In a bear market, it helps investors to lighten their positions and avoid risks, because it is equivalent to redemption without handling fees. In the falling market of funds, what we are most worried about is the handling fee, which is the role of dividends. If it is in a bull market, dividends may make investors miss profits.

How to choose the dividend method:

There are two forms of dividend, one is "cash dividend" and the other is "investment dividend". Whether it is cash dividend, safe deposit or dividend reinvestment, there is no difference between the two dividend methods. Simply put, this is a question of whether the fund manager will give you a free profit-taking opportunity. How to choose this depends on personal needs and market conditions.

(1) Market analysis: When the market is at a high level and you expect it to rise in the future, then reinvesting dividends is the best choice. It can not only save redemption fees, but also get on the bus for the second time and increase investment. When the market is at a high level, and you expect it to be sideways, falling or fluctuating repeatedly in the future, it is the right way to choose to put dividends in the bag. When the market is at a low level, it is a good choice to choose bargain-hunting and reinvest in dividends. If you are afraid of falling, you can stop loss first. But generally, there will be no dividend at this time, and the fund manager is busy controlling the withdrawal and has no money to distribute to everyone.

(2) For individuals: if you are looking for long-term benefits (2-3 years), especially friends who are making fixed investment, reinvesting dividends for free is the biggest benefit, so you must choose. The rate cost can be less. If you are pessimistic about the future fund income, or reach the target node of take profit, it is most appropriate to choose to leave the bag for safety.