Will the fund make money by buying at a low valuation?
Not necessarily, whether investors underestimate the range or invest in funds, the probability of making money will be higher than that of buying at high valuation. Low valuation refers to the situation that the fund price is lower than the overall market price-earnings ratio or the industry price-earnings ratio. When the fund is in a low valuation state, the fund price will rise in the future, and investors will get more income through buying and selling spreads. However, investors should not only look at the valuation level, but also consider other indicators of the fund, such as fund type, historical performance level, fund manager and annualized rate of return.
Why do funds make more money by buying at low points?
When buying and selling funds, we often find that we obviously bought the same fund. Why do others make money, but we don't make money or even lose money? A large part of the reason is the wrong time to buy. Investors buy funds at high points, and the price they buy is too expensive, which leads to high cost of holding positions. If they want to make profits by buying and selling funds, they must sell them at a higher price, which may take longer and face greater risks.
If investors buy funds at low points, the cost of holding positions is relatively low, the space for further decline is limited, and the potential for making money is great; The holding period is mostly positive income, and there are many profit opportunities, so you can sell and leave at any time; During the holding period, if there is floating profit support in case of short-term retracement, you can face fluctuations more calmly.
In short, investors should not look at the valuation first, but should pay more attention to the analysis of the company and whether it is optimistic about the future, and then pay attention to the valuation and rationality of the industry.