Are equity funds risky?
Equity fund is a kind of fund that mainly invests in the stock market, and its risk is relatively high. This is because the stock market itself has a large fluctuation type, which is influenced by many factors such as market economy and politics, and the price fluctuates frequently and unpredictably. Therefore, if investors choose equity funds to invest, they need to have a clear understanding of their risks and benefits, and do enough risk management.
The return of stock funds is closely related to the change of stock price. When the stock market performs well, the income of equity funds will be considerable. But when the market falls, the net value of equity funds may also fall.
It should be pointed out that equity funds are not without advantages. Compared with other types of funds, equity funds have certain advantages in long-term asset appreciation, which is especially suitable for investors to hold and accept certain market fluctuations for a long time. In addition, investors can avoid the risk of stock funds through reasonable asset allocation and risk diversification.
Is equity fund suitable for fixed investment?
Fit. For long-term investors, under the premise of controllable risks, choosing appropriate equity funds for fixed investment can obtain relatively stable long-term returns. The following are several reasons why equity funds are suitable for fixed investment:
1, long investment period
Equity funds are suitable for long-term investment, so such funds are generally suitable for medium and long-term fixed investment plans. By investing in stock funds on a regular basis, the investment risks can be dispersed, and it is possible to obtain better returns in a long enough time.
2. Long-term volatility is small.
Although the risk of stock funds is high, in the long run, market fluctuations will usually be smoothed out. With the passage of time, fund managers can adjust according to market conditions, thus reducing risks.
3. Higher income potential
Because equity funds mainly invest in the stock market, the income potential is relatively high. Equity funds that perform well in the market can bring high returns to long-term investors.
However, it should be noted that equity funds are not suitable for everyone to make a fixed investment. For risk-averse or short-term investors, stock funds may have too high fluctuation risk. In addition, when choosing stock funds, we need to pay attention to the industry, company, fund manager, cost and other information of fund investment to avoid possible risks.