Fund investment is not smooth sailing, and sometimes it will encounter market fluctuations and the decline of fund net value. So what does the withdrawal of funds mean? Today, Bian Xiao has prepared what is the meaning of fund withdrawal for your reference only!

What do you mean by withdrawing funds?

Fund withdrawal refers to the decline of fund net value from the highest to the lowest in a certain period of time. For example, if an investor buys a fund, the net value of the fund rises from 1 yuan to the highest net value 1.5 yuan, but then it starts to fall and the net value of the fund falls to the lowest value 1.2 yuan, then the withdrawal of the fund during this period is 0.3 yuan.

Fund retracement can be used to measure the investment risk and resilience of funds. Generally speaking, the smaller the retracement, the lower the volatility of the fund and the smaller the investment risk. Conversely, the greater the retracement, the higher the volatility of the fund and the greater the risk. In addition, fund withdrawal can also reflect the risk control ability of fund managers. If fund managers can adjust their positions and strategies in time to avoid or reduce unnecessary losses, then the return of funds will be relatively small. On the other hand, if the fund manager can't respond to market changes in time, or the investment strategy makes mistakes, then the withdrawal amount of the fund will be relatively large.

Is it normal to retreat?

There is no fixed answer to whether the withdrawal of funds is normal, depending on the specific situation. Investors can analyze from the following aspects:

1. If the withdrawal of funds is caused by the overall decline of the market, then this withdrawal is normal. No investment target can completely get rid of the influence of the market, and it will be dragged down when the market falls. Investors should pay attention to the performance of the fund relative to the market or similar products. If the withdrawal amount of the fund is less than the market or similar products, it shows that the fund has strong resilience and comparative advantage.

2. If the withdrawal of funds is caused by the wrong choice of investment targets, then this withdrawal is abnormal. Because in this case, the fund manager did not do his job well and did not find and avoid risks in time, investors can consider adjusting their positions or stopping losses.

Is the capital withdrawal rate high or low?

The withdrawal rate of funds is not as high as possible, nor is it as low as possible. The withdrawal rate represents the fluctuation range between the highest point and the lowest point of the fund's net worth over a period of time. For example, if an investor unfortunately buys at the highest point, what is the biggest loss?

For investors who buy funds at one time, the smaller the withdrawal amount, the better. Because the withdrawal is small, the biggest loss in the future is likely to be smaller. However, if the fund is fixed, the bigger the withdrawal, the better. Because the bigger the withdrawal, the lower the cost of buying funds during the decline, and the more shares you get, which can reduce the cost of buying.

What do you mean by withdrawing funds?

Generally speaking, the withdrawal of funds is a decline, which is also called a callback to a certain point of the original increase. For example, a fund has been rising from the net value of 5 yuan to the net value of 8 yuan some time ago, but it began to decline in the past two days, with a big drop, and its net value soon fell to 5 yuan, so this is called divestment.

The withdrawal of the fund can also be said that the net value of the fund has decreased compared with the previous period. Simply put, investors who invest in this fund will lose money in a short time. The official explanation for the withdrawal of funds is that in a certain period of time, the net value of the account is backward from the highest value until the net value falls back to the lowest value, and the net value decreases during the period.

For fund withdrawal, we should know two things: First, fund withdrawal is normal, and the reason why fund withdrawal is normal is because funds, like stocks, have ups and downs. No fund's net value is rising every day, even the fund with the best return will fall back.

Second, the role of fund withdrawal rate, whether a fund is excellent depends on its performance, often depends on its maximum withdrawal rate, in order to test the fund management team's ability to control the risk of market fluctuations. Investors should look at the maximum withdrawal rate when buying a fund, because this is probably the biggest loss after you buy this fund, so be prepared psychologically.

The meaning and definition of capital withdrawal

Maximum retracement = (previous highest value-period lowest value)/previous highest value.

"Fund withdrawal" refers to the extent of the decline in the net value of funds in a certain period of time. This index also reflects the investment management ability and risk control ability of fund managers to some extent.

We should also treat the withdrawal of funds rationally. The withdrawal of funds reflects the possibility of fund losses to a certain extent, but it does not mean that the smaller the withdrawal of funds, the better.

For example, while the withdrawal of funds is relatively small, it may also mean that the investment operation of fund managers is relatively conservative, and the return on investment may be relatively low.

Therefore, judging whether a fund is worth holding depends not only on the withdrawal degree of the fund, but also on the market situation, investment target, investment strategy, investors' own risk tolerance and other factors.

What is fund market sentiment?

Every investor will have his own view of the current market, which is hidden behind their trading behavior. Market sentiment is actually a comprehensive display of the views of all participants in the market, reflecting the overall mood of buyers and sellers in the market-fear or greed, optimism or pessimism. Although the long-term trend of the market is determined by the comprehensive effects of fundamentals, macroeconomics and other factors, market sentiment can affect its short-term fluctuations. Foreign research shows that market sentiment can predict stock returns to some extent. When the market sentiment is optimistic, growth stocks, small-cap stocks and blue-chip stocks have stronger ability to obtain excess returns; When the market sentiment is low, newly listed stocks, high-volatility stocks and high-growth stocks are not optimistic and the prices are low.

Andre Kosztolanyi is one of the most successful investors in the 20th century's financial history. He thinks that psychological emotions account for 90% of the market.

In the eyes of Soros, the "man who defeated the Bank of England", the market is the result of participants' emotions, and his outstanding point is to skillfully use market emotions to become a "yellowbird" in investment, which is not affected by market emotions.

Fund Market sentiment index

turnover

Volume refers to the total number of lots reached by the stock buyers and sellers (1 lot = 100 shares). Combined with the transaction amount, it comprehensively reflects the overall market activity, capital scale and degree of difference. When the market activity is high and investors want to enter the market for a share, there will be a shortage of supply and the trading volume will naturally increase; When the market is depressed, more people want to sell and fewer people buy, and the turnover will shrink. Briefly introduce two common forms of resignation:

Volume-the market is highly active, but there are great differences between long and short sides, usually at the turning point of the market.

Shrinkage-the market transaction is cold, but all parties in the market agree on the trend of the market outlook, which may be bearish or bullish.

At the same time, by dividing the trading volume by the total number of shares in circulation, we can get another commonly used index to measure market sentiment-turnover rate, also known as "turnover rate", that is, the turnover frequency of stocks in the market in a certain period can reflect investors' willingness to buy. Generally speaking, high turnover rate represents good stock liquidity, and buyers and sellers actively participate in the market. However, it should be noted that behind the high turnover rate may be the participation of short-term funds, and the market is prone to large fluctuations at this time.