Because: Only when the net value of the fund falls to 0 yuan, will all the principal be lost.
General fund net value will not fall to 0 yuan. If the liquidation conditions are met, the fund may be liquidated, and there will be some money after liquidation, and there will be no loss.
After purchasing funds, investors should focus on long-term investment as much as possible. If they lose money, they will redeem it, and if they go up, they will buy it. It's easy to chase up and kill down, and eventually you will get stuck in it.
Fund, in English, refers to a certain amount of funds set up for a certain purpose. It mainly includes trust and investment funds, provident funds, insurance funds, retirement funds and funds of various foundations.
From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses. The fund we are talking about mainly refers to the securities investment fund.
Extended data:
According to different standards, securities investment funds can be divided into different types:
(1) According to whether the fund unit can be increased or redeemed, it can be divided into open-end funds and closed-end funds. Open-end funds are not traded on the market (as the case may be), but are purchased and redeemed by banks, brokers and fund companies, and the fund scale is not fixed;
Closed-end funds have a fixed duration and are generally listed and traded on the stock exchange. Investors buy and sell fund shares through the secondary market.
(2) According to different organizational forms, it can be divided into corporate funds and contractual funds.
A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund;
The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. China's securities investment funds are all contractual funds.
(3) According to the different investment risks and returns, it can be divided into growth funds, income funds and balanced funds.
(4) According to different investors, it can be divided into bond funds, stock funds, money funds and hybrid funds.
The difference between open-end fund and closed-end fund
(1) The variability of fund size is different. Closed-end funds have a definite duration (in China, the duration is not less than 5 years), during which the issued fund shares cannot be redeemed.
(2) There are different ways to buy and sell fund shares.
When a closed-end fund is initiated, investors can subscribe to the fund management company or sales organization;
When closed-end funds are listed and traded, investors can entrust brokers to buy and sell at market prices on the stock exchange.
When investors invest in open-end funds, they can purchase or redeem them from fund management companies or sales organizations at any time.
(3) The buying and selling prices of fund shares are formed in different ways. Because closed-end funds are listed on the exchange, their buying and selling prices are greatly influenced by the relationship between market supply and demand.
(4) The investment strategies of funds are different. Since closed-end funds cannot be redeemed at any time, all the funds raised can be used for investment, so that fund management companies can formulate long-term investment strategies and achieve long-term business performance.
Open-end funds, on the other hand, must keep some cash for investors to redeem at any time, but not all of them are used for long-term investment, and generally invest in assets with strong liquidity.