Why do some people always say that when buying funds, financial novices should not invest in a full position, but should use fixed investment to invest funds?
1. Low investment requirements
Most of the "financial novices" are investors who have less understanding of equity investment, although the income may be higher, but because they do not know much, they will worry about large-scale losses due to their own operations.Some people describe the stock market as a boxing ring, institutions, main forces and other large funds are professional boxers, and "newbies" or most retail investors are ordinary people, directly participating in stock investment is ordinary people against professional boxers, the possibility of victory is almost zero.It is difficult to make money by entering the stock market game by yourself, but we can choose a professional "boxer" (fund manager) to fight instead of us, then it is a confrontation between professionals and professionals, and even between professionals and other retail investors. It is more feasible to make money in this way, and there are no high requirements for our investment ability.
2. Fixed investment reduces investment risk
For "newbies", the biggest worry in the investment process is definitely investment risk. Although the investment risk of the fund is much lower than that of stocks, this is only relatively speaking, if compared with bank deposits and some medium and low-risk wealth management products, the investment risk of the fund is still relatively high.But "newbies" obviously can't tell what price point is now and when to buy.However,If you buy high, don't worry, when the market falls, you can buy more stocks to reduce the cost of holding, and the market is cyclical, when the market reverses, it is easy to turn a loss into a profit. This phased approach minimizes the fund's investment risk.
3.Long-term holding for higher profits
Although the fixed investment of the fund can reduce the investment risk, if it cannot be held for a long time, then it is not recommended to choose the fund for investment.The market is cyclical, and A-shares are characterized by "short bull market time and long bear market time". Then the time of book loss in the investment process may account for most of the time, if the redemption mentality cannot be stabilized, then choosing a fund investment is a mistake. If you can hold it for a long time, when the market reverses, you can quickly make a large profit, because you already hold a large number of low-cost fund shares in the early stage. In fact, sticking to fixed investments and holding for the long term also has the advantage of forced saving.
For financial novices, fund investment is more suitable. If you don't have a complete understanding of the financial market, then you still have to choose index funds instead of hybrid funds and stock funds, and passive funds are relatively more advantageous.
