1. Index funds and equity funds are a combination of a series of stocks invested in a specific index or a specific range. The stocks in this portfolio will have an impact on the fund's income because of different weights and price fluctuations. Since I began to pay attention to stocks, I have never seen an index or a sector or a specific range of stocks fall.
fund
In other words, the stocks invested by index funds and equity funds are relatively scattered and the risks are scattered.
Stock investment is the direct purchase of stocks traded in the market. Ordinary people can't buy dozens or even hundreds of stocks, so the risk of stock investment can't be as dispersed as a fund. If you invest in a few stocks, once you stop trading, your investment will suffer huge losses.
Second, the fund is managed by a team led by the fund manager. Their job is to study stocks and choose the corresponding stocks. Individuals don't have so much experience and resources to study stocks. Therefore, if it is invested by professionals, the risk will be relatively small.
stock
One last word. Investment funds must choose the fields and managers of fund investment. Funds that open positions will not buy and sell at any time like individuals who invest in stocks. There are also many constraints in the field of fund investment, and funds rarely follow hot speculation. Therefore, in investment funds, we should choose funds in areas that we are optimistic about for a long time. The same is true of choosing a fund manager.
The risk of fund investment is low, and the income will generally be less than that of stocks. Stocks can go up and down and get 10% in one day, which is impossible for fund investment.
stock