Funds are generally gathered in professional fund companies and managed by professionals. Because these people have passed the strict examination of the relevant financial departments and have rich experience, they have incomparable advantages in professional knowledge and information processing. If the fund is operated by them professionally, its performance will generally exceed that of ordinary investors. According to statistics, during the period from 1996 to 2007, the proportion of individual investors making money was less than 10%, while more than 90% of retail investors were losing money. It is the existence of personal operational disadvantages that the professional advantages of fund companies gradually emerge. Moreover, fund companies can also solve the problem of insufficient time and energy for investors.
Second, diversify investment risks.
In stock market investment, in order to avoid risks, people will spread their funds among different investment objects. But for new investors, if they operate by themselves, time and energy are limited, and investment is prone to difficulties. If the fund is placed in a fund company, it will be different. Because it gathers the funds of all kinds of investors, it is large in scale and can invest the funds in various securities according to the wishes of investors, which successfully disperses risks and effectively protects the interests of investors.
Third: strong liquidity and liquidity.
Because funds can be bought and sold at any time, they show good liquidity and liquidity. This is slightly better than other investment products such as collections and real estate. Moreover, its trading threshold is low, there are no restrictions on investors and the procedures are simple.
Fourth, the cost is lower.
Because the fund mainly gathers scattered small funds to form a certain scale, and then it is managed by the fund company. Under the influence of scale effect, fund managers can not only build investment portfolios more scientifically, help investors resist risks, but also greatly reduce costs. This has opened a convenient financial management door for many small and medium-sized investors, so it is widely favored by small and medium-sized investors.
Fifth: stable return on investment.
For the safety of investment, many people choose treasury bonds and savings, but these two wealth management products have low returns and are always affected by inflation. Funds can have a high average rate of return. According to the statistics of relevant state departments, the average annual rate of return of funds in China from 2003 to 2006 was 8% ~ 29%, far exceeding the national debt and savings. Therefore, if ordinary families want to make stable profits, they may wish to invest in funds.