The three pillars of investment that remain unchanged: stocks, bonds and real estate. The corresponding fund product is stock fund. Bond funds and Reits funds. In the financial market, stocks and bonds are undoubtedly the two most important tools.
Finance is the financing of funds. If A urgently needs to do business but has no money, B has a small amount of unused spare money in his hand, which will be temporarily used by A, so that the financial market can operate. But there are two ways of financing this money.
1. I will lend you the money directly. I am your creditor. I have nothing to do with your business. Even if you fail in the future, you must find a way to repay the money and interest I lent you. If A is a more radical entrepreneur, he can use bonds to finance if he is not afraid of paying interest in the future.
2. I bought your business directly. I became a shareholder of your company, or even your boss. The money I gave you does not need to be paid back, nor does it require any interest. We share weal and woe. If I misread your business, I will be unlucky if it fails. But if your business gets bigger and bigger and is successful, I, as a shareholder, must share in the profits earned by the company in the form of dividends. If A is a conservative entrepreneur who is worried that his business will fail in the future and he will be in debt, he can raise money in the form of stocks for a long time.
On the way of our financial management, stocks and bonds should not be neglected. It is an immature performance not to touch stock funds or bond funds at all. Since investing in bond funds is simpler and easier to manage than investing in stock funds, and the risks and expected returns of bond funds are far less than those of stock funds, the subscription fees, redemption fees and management fees of bond funds are relatively low. Although the yield of the bond base is low, it is still far higher than the money base and bank savings in the long run.
From the term of investable bonds, bond funds can be divided into short bond funds, medium and short bond funds and long-term bond funds. From the perspective of whether to invest in stocks, it can be divided into: secondary bond fund, primary bond fund, pure bond fund and convertible bond fund.
Ordinary investors are recommended to invest in pure bond funds. Because only pure investment objects can you know what you are buying with your money and how high the potential benefits and risks are.
In the world of investment and financing, the biggest risk is not the risk of loss. If you know that the risk of this product is very high before you buy it, and you make asset allocation in advance, even if you lose 50% in the future, you are also mentally prepared. Although you are still unhappy, you can still accept it. What is really scary is that the original product will never lose money, so it is unacceptable that the product is heavily held, or even the entire warehouse goes to invest, and suddenly loses 15%. The most terrible risk in the world is the risk you didn't realize you were taking. It's like death is not a terrible thing. I'm afraid that you will suddenly encounter personal changes without making any preparations. Therefore, in order to avoid this risk, we recommend pure bond funds with more controllable risk for ordinary investors.
