Analysis of whether we should sell the fund in the face of losses
After years, the net value of the fund fell sharply, which made many fund friends lose confidence in fund investment. In fact, market fluctuations are very normal. Xiaobian here sorted out whether we should sell the fund in the face of losses for your reference. I hope everyone will gain something in the reading process!
Should we sell the fund in the face of losses?
The decline in the net value of the fund is not the reason for us to sell the fund, but to return to the fundamentals of the fund and re-examine our investment objectives before making a decision. First of all, we need to analyze whether the reason for the decline of the fund is due to the lack of investment ability of the fund manager or the market, and we need to observe it from a relatively long-term perspective. We think we should give it at least one year's observation period. If the fund manager's investment ability is poor, which makes the performance during the observation period worse than the average of the same kind or the market benchmark, we have no confidence in the fund manager, so we might as well choose redemption. If it is only because of the market decline, the release of systemic risks often provides safer investment opportunities to a certain extent. Don't sell the fund when the market is low. However, if the decline in the net value of the fund has made us sleepless, then we should have bought a product that is higher than our own risk tolerance. At this time, we can consider lowering our position or adjusting the fund. On the one hand, we can reduce the volatility of net worth by adjusting stock funds to hybrid funds or adjusting hybrid funds to bond funds. On the other hand, perhaps we have bought products with relatively concentrated positions, which have risen particularly well in the past two years, but the centralized holdings have also fallen sharply in the face of market correction. We might as well adjust our positions to some products with more balanced styles.
Choose a new fund or an old fund
Investors need to correctly understand the advantages and disadvantages of buying a new fund, and make a careful choice in combination with multiple factors. Many investors buy new funds because of the consideration of buying cost, but the new fund with a face value of one yuan does not mean that it is "cheaper" than the old fund whose net value has risen by more than one yuan. The net value of the fund is not "cheaper" as the lower it is, which is essentially different from the price of the stock. The price of stock depends on the price people are willing to pay. Investors can decide whether the stock price is overvalued or undervalued according to the profitability and cash flow of listed companies. The price of the fund is based on the value of the investment position divided by the share, which has nothing to do with how much investors are actually willing to pay for the fund, and has nothing to do with the future upside of the fund.
if the investment management ability of an excellent fund manager is recognized, and the new fund has the same strategy as the old fund, it may be a good investment choice to buy the old fund managed by the fund manager. After a new fund is established, it usually has a opening period of about 6 months. Although the specific opening time and market are decided by the fund manager after comprehensive consideration, if the opening time happens to meet the upward stage of the market or the short-term high point of the stock market, the new fund may not have more advantages than the old fund. Of course, if the new fund encounters a continuous decline in the market during the opening period, in theory, the fund manager can adopt a strategy of slowly reducing the position, which can make the opening cost lower to a certain extent and have an advantage over the old fund in net worth performance in the short term. But in any case, from the perspective of long-term investment, "new" and "old" are not the considerations for buying funds, but whether we believe in the investment ability of fund managers.
the relationship between open-end fund and closed-end fund
the isomorphism of open-end fund and closed-end fund has become two basic modes of fund operation.
an open-end fund refers to an investment fund whose scale is not fixed, but can issue new shares or be redeemed by investors at any time according to market supply and demand. Closed-end funds, as opposed to open-end funds, refer to investment funds whose fund size has been determined before issuance, and whose fund size remains unchanged after issuance and within the prescribed time limit.
before 24, open-end funds were not listed and traded on the stock exchange, but were generally purchased and redeemed through consignment agencies such as banks or direct selling centers. After 24, China innovated the operation of open-end funds, allowing some open-end funds to be listed and traded on the stock exchange, and this kind of open-end funds became listed open-end funds (LOF). The scale of the fund is not fixed, and the fund unit can sell it to investors at any time or buy it back at the request of investors; There is no duration, and theoretically it can exist forever; The price is determined by the net asset value. Closed-end funds have a fixed duration, during which the fund scale is fixed, generally listed and traded on the stock exchange, and investors buy and sell fund units through the secondary market; You are not allowed to accept new shares and offer shares for a period of time until a new round of opening-up, when you open up, you can decide how much you offer or how much you invest again, and newcomers can also buy shares at this time; Generally, the opening time is 1 week and the closing time is 1 year; The price is determined by the relationship between supply and demand, and the net value of the fund will affect the fund price, but the two are not unified. Usually, closed-end funds trade at a discount.
Open-end fund is one of the basic forms of fund operation all over the world. Fund management companies can sell new fund units to investors at any time, and also need to buy back the fund units they hold at any time at the request of investors. Open-end funds have become the mainstream varieties in the international fund market, and more than 9% of the fund markets in the United States, Britain, China, Hongkong and Taiwan Province are open-end funds.
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