There are many financial channels now. Why do we need to buy index funds? Let's talk about the benefits and risks.

First look at the rate of return. Index funds have the highest rate of return among all funds, with an annualized rate of return of 10%, which can reach more than 15% with investment strategies. The yield is much higher than that of money funds and bond funds, and in the long run, the income of money funds and bond funds can't run away from inflation.

Looking at risk, although index funds invest in stocks, the risk is much smaller than that of stocks. Because the basket of stocks invested by index funds usually falls badly when encountering negative events such as black swan, but because individual stocks account for a small proportion in the whole index, the decline of individual stocks will not have a great impact on the whole index. For example, the plasticizer incident in the liquor industry, although Maotai's share price fell, did not have much impact on the Shanghai and Shenzhen 300 index funds.

Investing in index funds can not only avoid the Black Swan incident, but also bring an average annual return of 12%. Therefore, Warren Buffett has repeatedly recommended index funds to ordinary investors in public, which is also the only variety he recommended to investors. Buffett said that by investing in index funds regularly, an amateur investor who knows nothing can often beat most professional investors. Buffett also made a will that if he dies, 90% of the cash in his name will let the trustee buy index funds.

Here is a case of Hong Kong residents' investment index fund.

An ordinary wage earner in Hong Kong, his life income is the average median. If he starts working at the age of 1964 18 and invests 20% of his income in the Hang Seng Index Fund every year, his annual investment will gradually increase from 500 yuan to 20,000 yuan. By the time he retires at the age of 58 in 2004, he will have assets of 6.6 million pounds.

If he retires at the age of 68 in 20 14, he will have assets of15.76 million yuan. To complete all this, the total amount of principal he has invested every year is only 650,000 yuan. It is only a fixed investment year after year, with a cumulative fixed investment of 650,000. When you retire, you will have more than 6,543,800 yuan in assets. This is just one person. If it is a family with two employees, it is easy to save 3 1 10,000 yuan of assets when retiring. This is the power of investing in index funds. You don't need to master any advanced investment skills. You only need to spend a part of your income every year to make a fixed investment.

This is also the reason why we should insist on investing in index funds.