Smile curve

Fixed investment smile curve

Start fixed investment

Insist on investment

The cost of sharing is rising.

Continue to invest

realize profits

Smile curve theory is a theory that makes the fund's fixed investment produce relatively stable income effect.

Make a fixed investment when the market falls, reduce the cost of holding funds, wait for the market to reverse, and then take profit and quit. In this process, the net value of the fund first fell and then rose, and what came out was a curve similar to "smile".

Example of smile curve

20 18, Lao Wang first came into contact with fund financing. He followed the advice of Xiaotian, an investment consultant, and chose a fixed investment. As a result, the market fell all the way at 18, and Lao Wang's fund has been losing money. Every day, watching the wealth shrink, Lao Wang's heart ached, and he quickly contacted Xiaotian, an investment consultant, to consult whether to cut the meat and clear the warehouse. Xiaotian suggested that he must insist on fixed investment: "You can gradually increase the principal. As the number of buying points decreases, the investment cost will also decrease. When the market rises, you will be able to turn losses into profits. "

Lao Wang doesn't understand: "Then why not wait until the market hits the lowest point before investing again?" Xiaotian explained: "Because it is difficult for us to accurately judge which position is the bottom of the market!" ! Many people step on the air because they have to wait for the market to bottom out. The more the market falls, the more afraid they are of buying. There is no chance to get on the bus when the market goes up. "Lao wang listened to an epiphany, strengthened the determination to vote. Not only is the buying cost getting lower and lower, but he has also accumulated a lot of fund shares.

By 20 19, a shares ushered in a round of skyrocketing. In the end, Lao Wang not only lost money, but made a fortune at the beginning of this wave of market. Lao Wang's experience accords with the smile curve theory. The smile curve solves the timing problem of fund investment. The seemingly simple curve explains the essence of fixed investment: only by not fearing and not giving up in the falling market can the fund's fixed investment smile be more beautiful.