- Fund classification
Funds can be divided into stock funds, bond funds , mixed funds and currency funds according to product categories .
Equity funds refer to funds that invest in stocks. Depending on the type of stocks they invest in, they can be divided into positive growth, growth and growth income. Equity funds have high risk and relatively high returns.
The investment area of ​​bond funds is the bond market, which has relatively low returns and low risks.
A hybrid fund is a fund that invests in both stocks and bonds. The advantage is that it takes into account growth in principal and income from bond interest.
Monetary funds are mainly invested in short-term bills or bank time deposits of not more than one year. Low income, low risk, safest. Currency funds can be purchased and redeemed at any time.
Funds can also be divided into active funds and passive funds.
Most active funds are managed by fund managers . In short, investors give their money to the fund manager, and the fund manager uses the investor’s money to buy and sell stocks. The profit and loss of an active fund depends on the operation and judgment of the fund manager.
Passive funds are also known as index funds . The index corresponding to each index fund is public. Investors can judge whether the index fund has investment value by studying the index.
- How to choose a fund
Investing is inversely proportional to return and risk. The higher the rate of return, the greater the risk investors need to take. Therefore, when choosing a fund, the most important principle is to fully consider your risk tolerance and choose an appropriate investment portfolio. For example, those who seek high security choose currency funds; those who seek stable income and hope for slightly higher income choose bond funds; those who seek high returns and can take some risk choose hybrid funds and equity funds. The latter has higher returns and greater risk than the former.
- What is the maximum drawdown rate?
In a nutshell, the maximum drawdown is when an investor buys at the top of the fund and sells at the bottom, losing more money. Because it’s a ratio, it’s a loss ratio.
The maximum drawdown rate can explain the confusion often encountered in a small white investment. Why do some people always make money when they buy star fund products when they are just established, but investors who buy when the fund is performing the best do not necessarily make money, and often suffer huge losses? The reason may be that fund managers have high risk appetite and do not Too much emphasis on withdrawal control has led to fund ups and downs.
- How to choose a fund manager
Fund managers should choose from three dimensions: performance, seniority and investment style.
Performance is divided into short-term and long-term. Investors should refer to their mid- to long-term performance over one, three and five years when choosing a fund manager. We try to choose funds with an annualized rate of more than 15%, the maximum rebate does not exceed 35%, and the number of funds under main management does not exceed 5. One fund is independently managed.
Judging the qualifications of fund managers is relatively simple and can be assessed from educational background, working hours and work experience. Fund managers with more than 7 years of work experience and experience in bull and bear markets will demonstrate more accurate judgment and investment logic in volatile markets.
Investors need to pay special attention to a fund manager’s investment style, make sure it aligns with their own investment philosophy, and understand the investment areas in which they excel. The style of specific investment managers can be analyzed through the fund prospectus, and the asset allocation of fund managers can be analyzed to a certain extent for their investment style.
- What is the fixed investment of the fund
Fund fixed investment refers to investing in a specific fund with a fixed amount at a fixed time. The biggest advantage of fund fixed investment is that it can reduce the cost and risk of investors. For example, investors invest 1,000 yuan per month in index funds. Because the price of the fund changes, the first time you buy 10 yuan, 1000 yuan can buy 100 copies, the second time it drops to 9.5 yuan, you can buy 105.3 copies, the third time it drops to 9 yuan, you can buy 111.1 copies, and the fourth The second time it rises slightly by 9.2 yuan, you can buy 108.7 copies. The fifth time, it continues to rise to 10.5 yuan, and you can buy 95.2 copies. The sixth time it rises to 11 yuan, you can buy 90.9 copies.
The price is different each time during the six months, and the previous higher purchase cost can be shared.
The cumulative number of shares purchased by investors in these six months is 611.2 shares, and the average cost is 6000 ÷ 611.2 = 9.82 yuan, which is much better than buying 6,000 yuan at a price of 10 yuan at the beginning.