What should I do if the fund falls?

Blindly covering positions and arbitrary stop losses are not necessarily the best methods.

Before deciding to cover their positions, they have at least confirmed that the fund can be saved, and investors are optimistic about its future trend.

If you choose to stop loss, you must have determined that selling the fund is more beneficial than continuing to hold it.

This is easier said than done, and not everyone is able to make more rational judgments.

Let me talk about several scenarios to help investors judge whether the fund should be sold.

Scenario 1: Underperforming the market For a stock fund, if its performance is not as good as the increase in the market index, it means that the fund manager's investment level needs to be improved.

Generally speaking, funds that have a lower growth rate than the broader market index are active funds, and fund managers make investment judgments based on their own will.

For investors, either switch to an active fund or a passive index fund.

Index funds do not seek excessive investment returns. They only seek to restore or replicate the performance of the index, at least to achieve the average market return.

If the market conditions are good and the fund you bought underperforms the market, it is better to choose an index fund.

Scenario 2: Changing fund managers. Choosing a fund is ultimately about choosing a fund manager. If a fund manager is radical, the result will be high and high, and your heart will be filled with excitement.

Fund managers are conservative, and the result is that they cannot achieve high returns and cannot achieve large losses.

The fund manager you selected has changed. You should take a look at the basic situation of the new fund manager before making a judgment.

1. Years of employment.

If your working experience is too short, you can consider changing funds.

2. Return on employment.

If his return on employment is relatively low, lower than the average performance of the same category, or even in a loss-making state, then you can consider changing funds.

3. Similar rankings.

If all or most of the funds managed under your name are ranked after 50%, you can consider changing funds.

Scenario 3: The basic logic of investing in lower-rated funds is to trust professionals.

Investors invest their own funds into funds that focus on a certain sector, and are managed by professional fund managers.

After fund managers make money, investors follow suit.

Since it is a market that believes in professionalism, we must rely more on some professional tools to help us make decisions.

Fund rating websites are the most commonly used and the most suitable websites for ordinary investors to make decisions.

The information on such websites is the result of a group of professionals who spend their days "hunting for stocks."

It is also very easy to find a fund rating website. Just enter the fund rating in the search engine and you can find it.

Of course, these websites not only include fund ratings, but also many professional research reports and analyses.

When we invest in funds, we want to save worry and effort. There is no need to become a professional investment manager. You just need to be able to understand these analysis results and help yourself make investment decisions.

The reference factors for fund ratings are generally performance and risk.

The levels range from one star to five stars. The more stars, the better the fund.

Generally, if the fund rating is less than three stars, you should consider selling.

Scenario 4: The stock market situation is not good. The stock market situation in 2015 was terrible, but the bond market situation was relatively good.

As the saying goes, when the stock market falls, the bond market is full.

The trend of the stock and bond markets is like a seesaw, where you are high and I am low.

For investors, if they find that the stock market is in poor condition and their stock performance is not good, they can switch stock funds to bond funds to avoid risks.

Of course, if the stock market is about to turn from bearish to bullish, then you should consider allocating stock funds as soon as possible to ensure that you do not miss the opportunity.

Scenario 5: Urgent need for funds Urgent need for funds is a veto for the fund.

No matter whether the market is good or bad, no matter what the profit situation is, if you need money urgently, you can only sell the fund.

If you hold multiple funds, you can decide which fund to sell based on the amount of funds required and profitability.

It is worth noting that the redemption time of funds is generally two to three working days, or even longer.

If you need funds urgently, plan ahead.

Summary: Many funds support subscription and redemption at any time, but it is still a relatively long-term investment.

Only by giving the fund manager enough time can his talents be brought into full play.

However, if after a period of observation we find that the performance of the fund underperforms the market, the fund manager replaced by the fund is unsatisfactory, the fund's rating is low, the overall stock market situation is not good, or there is an urgent need for funds, we can directly consider redeeming the fund.