Level: advanced

September 28(th), 2007

I read an article and found it very good. Now take it down and have a look.

Generally speaking, the dividends of the fund, no matter how much, are meaningless, even meaningless. It only makes sense in a few extreme cases, which will be described in detail later.

Funds, including LOF funds, have no "weight effect". In fact, there is not even any weight effect. This is completely different from the effect that many large-scale stock dividends of listed companies generally have the right to fill in, and has nothing to do with it. Citizens should have a clear understanding of this, especially new citizens, in case of detours. In the previous stage, when a large proportion of dividends of LOF funds approached, some citizens competed to choose the high premium in the market to buy LOF funds. This kind of behavior is a bit unreasonable and incredible. Unless your starting point is not to pay dividends, but to fool the citizens who pay dividends, it is better. Otherwise, either you buy it as soon as your brain is hot, or you are confused enough at the moment of purchase.

At present, fund dividends mainly take the following forms:

A. violent

B, dividend reinvestment

C. Cash dividends

In essence, fund splitting is equivalent to that when a fund pays dividends, all the citizens who bought the fund as of the ex-dividend date choose to reinvest the dividends without exception. In other words, it is essentially dividend reinvestment, so this article will not go into it separately. If you choose to reinvest in dividends, then dividends are absolutely meaningless. Your rights and interests have not changed because of dividends. In other words, whether you pay dividends or not, you should have as many rights and interests as possible in both cases.

However, if you choose to pay dividends in cash, there is still a little "meaning", as follows:

A, it happens that money is badly needed when dividends are distributed, and there is no good way to get it. Then take some cash bonuses to solve the urgent need;

B. determine that it is not suitable for investment funds as always. In this case, choosing cash dividend is actually a "gradual solution". In particular, if the fund originally chose the back-end subscription/subscription, and the back-end subscription rate has not dropped to zero so far, it is even more necessary to resolutely choose the cash dividend method.

Extend from a and b, and ask some related questions by the way. First, from the perspective of income, especially compound interest, fund investment should be a long-term process. If there is no money to spend in the middle and you need to use this money to buy a fund, then besides your original intention of making short-term profits, it may also imply that there is a problem with your strategy when investing in the fund, thus laying a hidden danger; Second, try to choose a good fund and choose a fund that can bring long-term returns to the people. Specifically, the basic people can refer to my other article, buy funds to see the net value of the unit? What is the "mass equation" for buying funds? . Because we always don't want the fund we bought today to be sold tomorrow, and we don't want to "have to" choose "cash dividend" when paying dividends because the fund we bought is poor. If the fund you buy is often rejected, you may wish to look back and see if there are many problems in the choice of funds.

The above are some views and opinions of the author on dividends of open-end funds, hoping to benefit the people.