The income from fund investment comes from the future. For example, if you want to redeem stock funds, you can first look at whether the future development of the stock market is a bull market or a bear market. Then decide whether to redeem or not, and make a choice on the timing. If it is a bull market, it can be held for a period of time to maximize the benefits. If it is a bear market, redeem it in advance and put it in the bag.
The dividend distribution methods of the Fund include:
Cash dividend means that the fund manager distributes the profits to investors according to the profits of the fund and the number of fund shares held by investors;
Converting dividend reinvestment into fund shares refers to converting the net profit to be distributed into equivalent new fund shares according to the net share value after ex-dividend, and allocating funds.
There is no reinvestment risk in cash dividends; Dividend reinvestment can realize profit appreciation and compound interest investment, which is more beneficial to long-term investors. Investors can choose the method of fund dividend when purchasing funds. If they don't choose the dividend method, they will default to cash dividend. The return on dividend reinvestment is higher:
Dividend reinvestment reinvests the cash dividends received into the fund or the stocks purchased, so as to increase the share of the original fund or stocks, commonly known as "accumulated interest", which can not only exempt the subscription fee for reinvestment, but also enjoy or increase the next dividend amount of the reinvested fund share, and increase the fund share with the number of dividends.
The safety of dividend reinvestment funds is high: choosing dividend reinvestment is conducive to reducing the cost of investors. At the same time, long-term investment in open-end funds, if you choose dividend reinvestment, can enjoy the compound interest growth effect of fund investment appreciation.
Relevant conditions for dividend reinvestment:
1, the bull market environment is the best condition for investors to choose dividend reinvestment. Directly convert cash into fund shares, so that investors can keep more fund shares in the bull market, thus sharing the capital appreciation brought by the bull market. It can be said that the role of bull market environment in the growth of fund net value is beyond doubt.
2. Effective measures to reduce the cost of capital purchase. Dividend reinvestment does not require investors to pay subscription fees again, which saves investors' timing costs and enables investors to make better use of the favorable market environment for investment. This is a time-saving, money-saving and labor-saving reinvestment method.
3. Can effectively play the role of "idle" funds. After investors choose cash dividends, if there is no certain investment plan and arrangement in the short term, the cash dividends distributed will often be "idle", thus losing its due value-added effect.