When the stock market goes up and down, the net value of the fund will inevitably fluctuate. The fluctuation directly determines the risk degree of the fund. Generally speaking, the greater the fluctuation, the higher the risk. If the volatility of the fund is too high, investors can make a fixed investment in the fund, because the fixed investment can be bought in time when the fund fluctuates greatly, so the value of reducing costs is more prominent.
Fixed investment of funds means buying a certain number of funds at a fixed time. For investors, it is more time-saving, worry-free and labor-saving to set up a fixed investment fund. For volatile funds, investors can choose to make a fixed investment on a certain day or a certain week, which is highly compatible with the fluctuation of funds.
For funds with the same rate of return, the smaller the fluctuation, the higher the management level of fund managers and the relatively stable income, but the lower the fluctuation, the better. For example, there is almost no fluctuation in the money fund, but it also determines the low yield of the money fund.
Volatility, also known as standard deviation, refers to the deviation between the monthly rate of return of funds and the average monthly rate of return in the past period.