The difference between funds and other investment methods

1. What is the difference between funds and bank savings?

The goal of bank savings is generally to meet short-term needs, such as immediate consumption or unexpected expenses. Its characteristics are that it is very safe and easy to cash

You can withdraw the funds at any time, and there is a certain amount of interest income; however, the interest rate of bank deposits is usually very low, and interest must be paid

Taxes cannot protect against inflation. Therefore, bank deposits are suitable as a form of cash storage and are generally not the first choice for long-term investment.

The risk of funds is higher than that of bank savings. At the same time, funds, as a relatively long-term investment tool, can obtain higher returns by investing extensively in stocks,

bonds and other instruments. . Especially open-end funds are often sold through bank outlets. The buying and selling procedures are similar to deposits

and withdrawals. Your purchases and sales are directly to the fund manager, and generally you can maintain a good balance sheet. fluidity.

2. What is the difference between funds and bonds?

Bonds are issued to investors when governments, financial institutions, industrial and commercial enterprises, etc. directly borrow money from society to raise funds, and promise to pay interest at a certain

interest rate and repay the principal according to agreed conditions. Certificate of credit and debt of gold. ?

The biggest feature of bond investment is that the income is relatively stable. The most common type of bond now is treasury bonds. Since the government guarantees the repayment of principal and interest, it is relatively safe. However, since the maturity of treasury bonds is generally relatively long, the yield may be lower than the market interest rate. In addition, the procedures for buying and selling treasury bonds from the banking website are relatively simple, easy to realize, and there is no need to pay taxes on the interest income. The disadvantage is that the scale of bonds issued by banks is currently relatively small, which cannot meet the needs of banks. Residents’ investment needs are not high, and the rate of return is not high.

The investment objects of the fund include stocks and bonds. The yield is generally higher than that of treasury bonds, and due to relatively sufficient diversification of investments, risks can be reduced to a certain extent.

3. What is the difference between funds and stocks? ?

Stocks are share certificates issued by a joint-stock company to investors when raising capital, representing the ownership of the company by the holders, that is, shareholders.

The income from stock investment is uncertain. If the company is doing well, you as a shareholder can share in the profits (usually in the form of dividends),

and can benefit from the increase in market stock prices. benefit from. Conversely, if something goes wrong with the company, your investment will lose value.

Since the operating efficiency of the issuing company is highly uncertain, and the market price of the stock fluctuates violently, the risk of stock investment

is higher. Only those who have more funds, have time for research and analysis, and can obtain relevant information in a timely manner have a greater chance of winning.

The fund is managed by experts and adopts a portfolio investment method, which can reduce risks to a certain extent, and the income is relatively stable compared with stocks.

Furthermore, the fund can be cashed out relatively easily. For most small and medium-sized investors, buying funds and entrusting experts to operate them is a better way to invest in stocks.