How about the investment risk of the fund? Before you buy a fund, you must first understand the specific risks and returns of the fund. Fully understanding the risks and returns of the fund is the first step to make a good investment in the fund. Investors must understand the basic knowledge. What are the risks and benefits of fund investment? Here is a brief explanation for you.
The figure above shows the average return rate of the main investment funds of several ordinary investors. This return rate means that if we buy funds under any investment situation and hold them for more than ten years, we can obtain a compound annual return rate. Monetary funds: 2.56%; Bond fund: 6.4%; Equity funds: 14.11%.
However, different fund risks are different. The risk here refers to short-term fluctuation risk. The following is the risk trend chart of three funds. You can see The fluctuation of monetary fund is the smallest, and it will hardly lose money. The fluctuation of bond funds is larger than that of monetary funds. Bond funds may suffer short-term losses in some periods of time. The stock fund at the top fluctuates more. The stock fund realizes its income through the sudden rise and fall in the short term, which is also the characteristic of the stock fund, high volatility risk and high return risk.
The summary is as follows:
Stock fund: highest return and highest risk
Bond fund: medium yield, medium risk
Monetary fund: lowest return and lowest risk
In fact, in the long run, the return rate of stock funds is the best, and its risk is also the highest. The suitability of our investment depends not only on the rate of return, but also on the risks we need to bear. We should consider whether we can bear these risks. If we can't bear these risks, it will have the opposite effect when we invest.
How to correctly understand "the greater the risk, the greater the expected return"? Some friends will think that "the greater the risk, the greater the return", which actually indicates that people are willing to take greater risks in order to expect higher returns. When we invest, we should not only look at the rate of return, but also consider the risks we need to take when we get so much return.
