As a "lazy financial management" strategy, the fund's fixed investment has been welcomed by many small partners. Generally speaking, the fault tolerance rate of fixed investment of funds is relatively high, and this operation strategy is simple and convenient. If you persist for a long time, the probability of making money can be improved a lot. However, not all funds are suitable for fixed investment. Also, not everyone is investing in index funds, so who is suitable to be an index fund? Let's collect some people who are suitable for the 202 1 index fund for everyone. What are the advantages of the broad-based index fund? I hope I can help you.
Who is suitable for the fixed investment of index funds?
1 investment with no investment experience. To paraphrase Buffett, "By investing in index funds, an amateur investor who knows nothing can often beat most professional investors".
Office workers who have no time to study the stock market. Financial management also takes time to invest. For office workers, the stock trading time is basically within working hours, and investing in stocks or other products requires a lot of time to learn and operate. Index funds are passive funds. As long as you make basic preparations and determine your own fixed investment plan, you basically don't need to spend too much time and energy to worry about it.
Three young people with little money. The entry threshold of index funds is very low, and the rate is not high. You can invest hundreds of dollars. Young people who have just graduated do not have much savings. They only need to invest two or three hundred yuan a month. The key is to develop investment habits through fixed investment of index funds, and you will see your wealth increase in a few years. Not only did it overcome inflation, but it also met a good opportunity to accumulate wealth and increase by about 30%.
People who want to invest for a long time and realize the steady growth of wealth. The value of fixed investment of index funds lies in stability and growth. Wealth is accumulated bit by bit, and with the compound interest effect of time, the value can increase exponentially in the future. Therefore, the fixed investment of index funds is suitable for those who are willing to make long-term planning and patient investment. Investment is not a bet. Want to get rich overnight, not suitable for investing in index funds.
It is not only a steady investment method, but also a practical philosophy of life for index funds to invest regularly and get rich slowly. Stick to all the beautiful things in the world, such as health, wisdom, interpersonal relationship and pattern, and you will reap a rich life in the compound interest effect of time.
What are the advantages of broad-based index funds?
The advantages of 1 broad-base index fund include low cost, high investment efficiency, keeping up with market trends, and responding faster than other funds when the market rises strongly.
Small error is also one of its advantages. The investment goal of index funds is to completely copy the index and obtain the same investment income as the index. Therefore, the tracking error rate is low, indicating that the fund operation level is high and the error risk is small.
The biggest advantage of broad-based index funds is that they cover more and wider industries, are evenly distributed and have more stable returns. Moreover, broad-based index funds are suitable for most investors.
Generally speaking, broad-based index funds have the advantages of low cost, high efficiency, small error and wide coverage. In the stock market, the reason for losses in most cases is that investors are too emotional. In order to reduce losses, it is safer to choose broad-based index funds. It should be noted that in the case of weak market, the risk of generalized index funds will be higher and will drop sharply with the stock market decline.
How to buy broad-based index funds?
1 Choose and determine the reliable fund company you want to invest in. The company size is an important measure. At present, fund companies with domestic funds exceeding10 billion should not be underestimated.
From the perspective of short-term investment, the timing of buying broad index funds mainly depends on investors' judgment on short-term market trends and styles.
If it is a long-term investment, investors need to pay more attention to the release or low systemic risk, and the stock market should be in a non-bubble stage.
4 The lower the tracking error rate, the better. The bigger the fund, the better. Meanwhile, the lower the cost, the better. Among them, the tracking error rate is low, indicating that the fund has a high level of operation and a small risk of error.
The advantages of broad index funds are mainly reflected in the wide dispersion range and the lowest combination adjustment cost and transaction cost. When the market is improving, the broad index fund can be used as the core allocation of long-term portfolio. The investment of broad index funds can be divided into long-term and short-term, and investors need to choose according to their actual situation.