I believe that many people have begun to open their own financial management doors through funds, but they don't know how to further acquire wealth through financial management. Therefore, Bian Xiao specially sorted out why so many people choose investment funds now, and I hope everyone likes it.
Why do so many people choose investment funds now?
Professional management: The fund is managed by a professional fund manager, with rich investment experience and professional analytical ability, which can formulate and implement investment strategies for investors and reduce the workload of investors' long-term stock research and decision-making.
Diversification of risks: Fund investment is diversified, and investment risks can be diversified by investing in different types of assets (such as stocks, bonds and money market instruments). This means that even if one asset does not perform well, the good performance of other assets can partially offset the risk.
Convenience and liquidity: fund investment is relatively convenient, and investors can buy and sell fund shares at any time. Compared with direct investment in a single stock, funds are more liquid, and it is easier for investors to realize the entry and exit of funds.
Flexibility: There are many different types of funds to choose from in the fund market, including stock type, bond type and hybrid type. Different types of funds can adapt to different investment objectives and risk preferences, and investors can choose appropriate fund products according to their own needs.
The most essential difference between funds and stocks lies in:
Scope of investment: The fund invests by pooling investors' funds to form a pool of funds, covering a wide range of investments, including stocks, bonds and financial derivatives. And stock is an investment in the ownership share of a specific company.
Risk diversification: the fund spreads risks by investing in various assets and distributes investment risks to different investors. However, stock investment is relatively concentrated, and the risk mainly depends on the performance and market environment of the individual company invested.
Management mode: the fund is managed and invested by professional fund managers, and investors do not need to participate directly. However, stock investment requires investors to study and analyze stocks themselves and make investment decisions.
Return on investment: the return on investment of a fund is usually determined by the overall performance of the fund portfolio, and investors share the return according to the proportion of fund shares held. Stock returns mainly come from stock price fluctuations and dividends.
Risks of funds and stocks
Both fund and stock investment are risky, and past performance does not guarantee future results. When making a choice, investors should make an evaluation according to their own risk tolerance, investment objectives and time period, and know the characteristics and market environment of relevant investment products in detail. If you need specific advice, it is recommended to consult a professional investment consultant or financial planner.
What are the tips for investing in open-end funds?
Tip 1: Don't borrow money to invest: Try not to borrow money to invest. Long-term investment will inevitably decline to avoid being burdened by interest and short-term lock-in. What are the skills Bian Xiao collected for investing in open-end funds? Relevant information, I hope you like it. )
Trick 2: Diversify investment: If you have enough funds, you can consider diversifying investment in multiple funds according to the investment characteristics of different funds. In this way, if a fund temporarily underperforms, its unsatisfactory performance will be offset by the excellent performance of another fund through diversification.
Tip 3: Be prepared for the long term: Most successful investors have long-term investment plans. Through long-term investment, you can give your funds time to appreciate and overcome short-term fluctuations. Generally speaking, the stock market fluctuates greatly in the short term, but if the investment time is long enough, the risk of short-term fluctuation can be avoided, and the stock selection and operation of professional fund managers have a better chance of winning in the long run.
Tip 4: Know the characteristics of the investment fund you choose: Before making an investment decision, you need to know your personal investment needs and goals. When choosing a fund, you need to read the fund contract, prospectus or prospectus carefully, learn about the fund from newspapers, sales outlets or fund management companies, truly and comprehensively evaluate the income, risks and past performance of the fund and fund management companies, and avoid choosing a fund that is not suitable for you.
Tip 5: Review your needs and situation regularly: Although we should make long-term investments, we need to update our investment decisions according to the growth of age, financial situation or changes in investment objectives. Most successful investors will pursue higher returns in the initial stage of savings investment, and gradually turn to more stable investment over time.
Trick 6: Don't operate too frequently: Unlike the short-term operation of investing in stocks and closed-end funds, open-end funds are basically a medium-and long-term investment tool. This is because the prices of stocks and closed-end funds are affected by market supply and demand, and fluctuate greatly in the short term, while the transaction price of open-end funds is directly determined by the net asset value, which is basically unaffected by market speculation. Therefore, it is not easy to make money by rushing in and out prematurely or chasing up and down, but it will increase the handling fee and increase the cost.
The risks of open-end funds are:
1, liquidity risk
The liquidity risk of open-end fund refers to the risk that the fund assets cannot be converted into cash quickly, so it cannot meet the possible redemption needs of investors, which is manifested in three forms: first, the payment risk caused by insufficient liquidity of assets and the inability to meet the redemption needs of investors in time; Second, the operational risk caused by the failure to absorb funds at normal prices; The third is the possible losses due to price uncertainty in the process of realizing the assets held.
2. The risk of unknown purchase and redemption prices
The subscription quantity and redemption amount of open-end funds are calculated according to the net asset value of the unit on the trading day of the fund plus or minus related expenses. When investors purchase and redeem fund shares on the same day, the reference unit net asset value is the data of the last fund trading day. However, investors can't predict the change of the net asset value of fund units from the previous trading day to that trading day, so investors can't know at what price when purchasing and redeeming. This kind of risk is the risk that the purchase and redemption price of open-end funds is unknown.
3. Systemic risk
Fund investment has the function of dispersing risks, but due to the inherent risks in the stock and bond markets, open-end funds will inevitably suffer losses. For example, when open-end funds invest in the stock market, the stock price of listed companies is not only affected by their own performance and industry, but also by macro factors such as government economic policies, economic cycles and interest rates, which makes the stock price show an uncertainty. Especially when there is an emergency in the fund investment market, both ordinary investors and fund management companies may face greater risks.
4. Non-systematic risk
The unsystematic risks faced by open-end funds include many aspects, mainly including market risk, interest rate risk, purchasing power risk, management risk and operational risk.
5. Force majeure risk
That is, the risks brought to fund investors when force majeure such as war and natural disasters occurs.