1。 How many funds did the fund manager invest in?
There is a book called Doctor, what if this is your mother? ",said is a similar truth. Imagine this hypothetical situation: a middle-aged man whose mother is terminally ill. They seek medical advice everywhere and try many methods (such as chemotherapy). Mother's old body can't stand the toss, and she is very weak due to treatment. After a recent group of chemotherapy, an oncologist suggested giving up treatment and living a happy life in the remaining limited life. My son was not very willing, so he went to another expert and asked, and his advice was that he could try again. At this time, the son was in a dilemma and asked the doctor this question: If this were your mother, what would you do?
If you give money to the fund manager, it is equivalent to hiring him to help you manage your money. There is also the deepest problem, that is, the agency problem. I have a more detailed discussion about this agent problem here: if the fund manager really has the ability to make money stably, why should he help others make money? -Wu Zhijian's answer
Because of this agent problem, investors are most worried about: how to ensure that the fund manager treats my money with 100% energy responsibility? The answer is not complicated: I need the fund manager to put his money in this fund, so he will take my money as his own. Of course, the fund manager can't just put a little money, but put a large part of his own property, so that I can ensure that he really cares about the fund, right?
In fact, many large institutions do have this requirement before investing in fund managers. After all, if the fund manager doesn't believe in his fund strategy and doesn't invest enough savings, why do you ask others to give you money to make you addicted? Unfortunately, many retail investors don't understand this truth and give money to fund managers in a muddle. They are irresponsible to themselves and their families. 2。 The real performance of fund managers and its comparison with industry benchmarks (such as stock index).
One of the most common mistakes that retail investors make when buying funds is chasing up and killing down. A lot of evidence shows that the fund investment strategy of chasing up and killing down has caused many retail investors to suffer huge investment losses. There are many reasons, and I have a more detailed explanation here: from the professional perspective of institutional investors, what are the common psychological and classic wrong operations of ordinary investors? -Wu Zhijian's answer
To invest in a fund manager from a scientific point of view, we first need to try our best to prove that the fund manager really knows what to do, not by luck.
Buffett once gave an easy-to-understand example about this issue. He said that if there were 1000 monkeys throwing coins there at first, and after a round of throwing, half of the monkeys guessed the direction of the coins, then 500 monkeys were eliminated, leaving another 500 monkeys. Then come to the second round, leaving 250 monkeys. And so on, after five rounds, there will probably be 30 monkeys left. These 30 monkeys may be geniuses to outsiders. But as we all know, these 30 monkeys are just lucky. What we investors need to avoid is giving our hard-earned money to these lucky monkeys to manage.
In real life, especially in China's fund market, there are only a handful of fund managers with good performance for more than five years, which is simply rare. The investment environment of fund managers faced by our retail investors is relatively poor: all the funds you see are screened out, because if the fund performance is not good, in most cases, fund companies will choose to close, which leads to the impact of "survival deviation" on the remaining funds. But among these survivors, how can you determine which ones are really good and which ones are just lucky? There are some statistical methods that can be identified, as shown below: how to choose a fund or fund manager by quantitative method, and how to construct a FoF by quantitative method? -Wu Zhijian's answer
In short, the fund you invest in needs to have a long-term and reliable historical performance for you to analyze and judge how high the real level of the fund manager is.
3。 Fund manager fees.
When we investors are faced with hundreds of fund managers, it is not easy to choose the truly qualified fund managers first. But even if you choose a competent manager, can he guarantee you to make money? The answer depends on many factors. One of the most important factors is the fund manager's fee.
No matter how good a fund manager is, even if he can get a high return (for example, 10% per year), if his expenses are high, then investors will have no money to earn in the end. This is a very simple truth, but many retail investors simply don't understand it. I have a more detailed explanation here: how to choose a fund? When do you buy it? -Wu Zhijian's answer
You may think what I said is too complicated, so I recommend a simple strategy for you. When buying funds, rank all the funds you may buy according to their total expense ratio, and then choose the cheapest fund to buy. This strategy is simple and easy to understand, and many studies in the past have proved its effectiveness. Much more useful than the ranking of Morningstar.