2. It is best to choose a fund with large fluctuations in net value for fixed investment, because a fund with large fluctuations has more opportunities to accumulate more low-cost fund shares in the stage of falling net value, and can make quick profits when the market rebounds. Among all kinds of funds, equity funds are more suitable for fixed investment business, such as Guangfa Jufeng, Guangfa Small Cap and Guangfa Jufu Fund. Because this method makes use of the time compound interest effect to make long-term investment profits, it does not need to choose the timing of entering the market, and it also disperses the short-term risks of long and short stock market and fund net value fluctuation.
3. Fixed investment is an investment method in which investors invest a fixed amount (usually every month) to buy designated open-end funds. It has three unique advantages: "long-term investment spreads low costs, many a mickle makes a mickle, compound interest increases value, and regular deduction saves worry and effort". Although there is generally not much money to buy funds regularly every month, if you choose a fund with good performance and stick to it for a long time, the accumulated principal investment and compound interest effect can create considerable wealth accumulation.
Due to the inherent advantages of the fund's fixed investment, it is very suitable for people with long-term financial planning, such as buying a house, educating their children, and supporting the elderly. For many investors who have participated in or are ready to participate in the fund's fixed investment plan, it is not enough to understand only the "three advantages" of the fund's fixed investment, but also the "four misunderstandings" of the fund's fixed investment to avoid losses caused by improper operation of the fixed investment.
Misunderstanding 1: Stop for fear.
Fund investment must first adhere to the long-term investment concept. The characteristics of funds are collective investment and expert financial management, and excellent stock funds can often obtain income that is synchronous with or even beyond the market average. According to Lipper and Bloomberg statistics, during the 20 years from 1983 to 2003, the American stock market experienced the irrational collapse caused by the excessive use of computerized trading in June 1987+00, the Persian Gulf war in June 1990, the terrorist attacks in new york in June 2006, and the terrorist attacks in June 2006. So the fund is a tool suitable for long-term investment.
However, when there is a temporary decline in the market, the net value of the fund tends to shrink temporarily, and many investors stop fixed investment (or even redeem the fund) for fear of falling. In fact, as long as investors insist on the fixed investment of the fund, they will have the opportunity to buy more fund shares at a low level; If we persist for a long time, the average cost will naturally decrease, so that we are not afraid of the ups and downs of the market and finally get good returns.
Myth 2: Redemption by Rise
Some customers found that the net value of the fund rose after a period of fixed investment, and chose to redeem it halfway for fear of market reversal. In fact, this practice also violates the original intention of their fixed investment fund. In fact, the reason why many people participate in the fund's fixed investment is that individuals have no ability to judge the market's ups and downs, and they must share the average income of the market with the help of fixed investment. Once redeemed because of the rise in net worth, it is actually an artificial judgment on the rise and fall of the stock market, thus falling into the trap of "short-sighted investment" again.
The fixed investment of the fund is like a long-distance train on the journey of wealth. Only by sitting at the end (usually more than 5 years) can we have the greatest chance to complete the journey of wealth and realize the financial goals planned in advance, such as "buying a house, educating children and supporting the elderly".
Misunderstanding 3: Choosing the wrong fixed investment variety
Some investors lack understanding of fund types and risk-return characteristics, thinking that all types of funds can make fixed investment, so they choose the wrong fund to make fixed investment. In fact, the average cost and risk control function of fixed investment are not suitable for all funds. The income of bond funds and commodity market funds is generally relatively stable with little fluctuation, so there is no advantage in fixed investment. However, the long-term income of equity funds is relatively high and fluctuates greatly, which is more suitable for fixed investment of funds.
Myth 4. Underestimation of future cash demand.
Many investors lack planning for their future finance, especially underestimate their future cash demand, or invest too much money in real estate, industry and other investments. Once the cash flow is tight, the investment of the fund may be interrupted. Because the fund's fixed investment is a long-term investment method, getting off the bus halfway may be far from the goal, especially if the stock market has ups and downs. If you need money badly at the low tide of the stock market, you may be forced to get off the bus and suffer losses.