When the fund falls to 0, the principal will be gone, but this phenomenon is basically impossible. Because from the nature of the fund, its net value is impossible to fall to zero. A fund may allocate a dozen or twenty stocks, and the stocks in the pool will always rise and fall, and there is almost no probability of falling to zero. Moreover, the net value of the fund has been falling, and it will be dissolved if it hits the set lowest price. The assets of the fund are less than 50 million for 20 consecutive trading days, and the number of fund holders is less than 200 for 20 consecutive trading days, which will trigger the liquidation conditions.
When the fund is dissolved, the remaining net fund value is distributed to investors. In the end, investors can still get some money instead of losing everything. Judging from the conditions of fund dissolution, it is really impossible for the fund to fall, let alone fall into negative numbers. So there is only one explanation for this situation, that is, the fund has been leveraged. If investors add leverage when buying their own funds, then after the fund falls sharply, investors may lose all their money and even need to post it backwards, but the net value of the fund will not fall to zero.
How to choose a fund?
1. Historical performance: Historical performance represents the performance of the fund since its establishment. The higher the historical performance, the better the fund.
2. Maximum retracement: The maximum retracement is the range from the highest to the lowest net value of the fund within a period of time, and the lower the maximum retracement value of the fund, the better.
3. Fund manager: The fund manager is the manager of the fund. He can choose someone with industry research experience and long-term fund management time. It is best to have a fund manager who has experienced the complete transformation of bulls and bears, or you can directly choose a star fund manager.
What should I pay attention to when buying a fund?
1, don't chase hot spots. When you know that a fund is a recent hot spot, it often means that the fund has basically reached a recent high point. If you buy again at this time, the next market may rise, but the probability of falling is greater. You can choose to wait and see, or you can choose a small amount of investment to test the water.
Don't invest all your money at once, even if you are very optimistic about a certain fund.
3. Don't buy funds with others easily. Funds bought by others may have made money in the past, but you should know that they will also fall if they go up for a long time. There is no fund that has been rising. When you start buying, it may be the beginning of the decline in funds.
4. Don't be superstitious about the size of the fund. You should know that funds with good performance may all be small funds.