Broadly speaking, funds are the collective name of institutional investors, including trust investment funds, unit trust funds, provident funds, insurance funds, retirement funds and funds of various foundations. Funds in the existing securities market, including closed-end funds and open-end funds, have the characteristics of income function and value-added potential. From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses. Because the investors of government agencies and institutions do not require investment returns and investment recovery, but require funds to be used for designated purposes in accordance with the law or the wishes of the investors, funds are formed.

Five basic principles of fund investment

Principle 1: Investment funds also need to take the initiative and stick to portfolio investment. Long-term investment of funds is not rigid, which is as undesirable as blind short-term trading.

Principle 2: Grasping the big and letting the small go is the first principle of fund portfolio investment. Compared with stock investment, fund investment should be greatly reduced, that is, the investment portfolio strategy of the fund should be determined according to the judgment of the general trend, and the basic allocation direction of the fund should not be changed because of the small stage of the stock market.

Principle 3: Historical gains and losses should not interfere with investment decisions. Investment is future-oriented, and decisions should be made according to future expectations, and cannot be disturbed by historical profits and losses.

Principle 4: Low-risk fund varieties can not be ignored. Low-risk fund variety investment has long been ignored by investors.

Principle 5: Pay due attention to small and medium-sized fund companies.