Can funds be traded frequently?
In fund financing, frequent trading is not recommended, because it will increase transaction costs, increase operational risks and reduce investment efficiency. Instead, we should determine the appropriate holding period according to the fund type, market environment, investment objectives and other factors we choose, and make timely adjustments according to market changes and our own situation. As a long-term investment and financial management tool, frequent trading is generally not recommended, because intraday trading has the following adverse effects on the fund:
1, increasing transaction costs: fund transactions involve various expenses such as subscription fees, redemption fees and management fees. If you buy and sell frequently, it will increase the expenditure of these expenses and reduce the investment income. For example, if the subscription rate of a fund is 1.5% and the redemption rate is 0.5%, then each transaction will cost 2%. If you trade 10 times a year, it will cost 20% and it is difficult to make money.
2. Increase operational risk: The price of the fund is affected by many factors such as market environment, fund manager's ability and fund strategy, so it is difficult to accurately predict its rise and fall. Frequent buying and selling is easily influenced by market sentiment, leading to wrong operations such as buying high and selling low, missing good opportunities, chasing up and killing down. For example, if a fund rises by 10% in a short time, you may feel that you have made money and sold it. But if this fund has more room for growth, you may miss out on higher returns. On the other hand, if a fund falls by 10% in a short time, you may feel a loss and sell it. However, if this fund is only temporarily adjusted, it may rebound later, and you may miss the opportunity to buy at a low level.
3. Reduce investment efficiency: the investment goal of the fund is long-term stable income, not short-term rapid income. Frequent buying and selling will distract attention and make it impossible to focus on the long-term performance and risk control of the fund. For example, if you pay attention to the price changes of the fund every day, you will ignore the important information such as the investment strategy, industry configuration and position changes of the fund, and you can't choose the right fund according to your investment objectives and risk tolerance.
So from the above aspects, the fund is not suitable for regular trading.