Due to the attraction of income, most investors tend to allocate all active equity funds, regardless of index funds. Since active funds can outperform index funds, can we all only buy active funds?
The answer is of course no. When we judge whether a fund is worth buying, we can't just consider it from the perspective of income, because the risk-return characteristics of passive index funds and active funds are very different, and they also play different roles in your asset allocation, not an either-or relationship.
The performance of active funds is unstable.
Investors who often observe the earnings rankings will find this problem. The fund that ranks first every year is not fixed, but dynamic, and it is different almost every year.
In other words, the list of outstanding active funds changes every year, and only a few funds are frequent visitors on the list. In other words, the so-called good fund you choose has a high probability of underperforming every year. Sometimes it outperforms the index, and sometimes it may significantly underperform the index.
It is much more difficult to choose active funds than index funds.
Comparatively speaking, the choice of index funds is much simpler. As long as the index fund chooses a good index, it can choose a good index fund with high probability according to several relatively simple indicators.
The factors that active funds need to consider are much more complicated, and choosing a good fund manager is a very difficult operation. We often say that people are the most difficult to grasp. Usually, we have never even met the fund manager. It is necessary to judge his or her work background, professional ability, investment style, risk control ability, historical performance, stability and so on.
It is difficult to hold a fund for a long time.
Many people may think this reason is ridiculous, but the fact is that few investors can hold a fund for a long time. For the fixed investment of the fund, more than 80% investors can't insist on fixed investment exceeding 1 year.
Give another practical example. Since its establishment in June, 2005, Guo Fu Tianhui Growth Hybrid Fund has achieved an amazing performance of 1 16 times in 2005, and has greatly outperformed the market index for a long time. It can be said that it is an ideal long-term excellent fund.
But this fund has never won the annual championship, and it rarely ranks as the best of the year. However, since its establishment, few investors have held such long-term returns comparable to Buffett's, and even fewer have held them for more than 10 years. That is to say, most people have not enjoyed the huge excess returns brought by star funds.
Therefore, if you are a fund white, then you can invest in index funds and cultivate your feelings for the stock market through investment; If you have some experience in investing in index funds, you can allocate some active funds to obtain excess returns. However, it is recommended to keep some index fund positions.
In the long run, index funds are less risky, which can ensure that you keep up with the market increase and get the average income from the market increase. After all, it's really hard to get excess returns beyond the market in the stock market.
At the present stage of A-shares, there are still opportunities to obtain excess returns. It takes a process for any market to move from emerging markets to mature markets, which may be 5 years or 10 years. However, investing in the stock market, whether it is stocks or funds, must have awe of the market and a rational and calm attitude. Therefore, even if you study active funds, it is recommended to form a portfolio investment with index funds.