In the end, we buy funds to make money. No matter whether you are a master or a doctor, it is the absolute principle that good performance can make money. Therefore, selecting performance is also the most important consideration for us to select active funds. Many fund companies boast about their past performance when promoting their own companies. Because stock funds are high-risk investments, no one can guarantee that they will make money. Past performance does not mean that future performance will be good. However, past performance cannot be the standard for selecting funds. How should we choose the right stock fund?
The past performance of the fund does not represent the future performance, but the fund with excellent past performance is more likely to perform well in the future than other funds. There are two factors to consider fund performance:
1. The fund should be established long enough. Many investors have such a huge misunderstanding that buying a fund is the same as buying a house and clothes. The brand new one is better than the second-hand one, but this thinking can never be used in investment. The second-hand ones in the investment field are often more valuable than the first-hand ones. In addition, many people like to buy new funds because fund companies and selling banks on a commission basis rarely promote old funds. There are many excellent old funds in the market that are buried in the seabed. When the new fund was listed, in order to make the first shot, the fund company had such an interest impulse and made efforts to promote it. Therefore, when selecting active funds, choose those that have been established for more than 3 years, preferably more than 5 years.
2. In the past, the performance of this fund has been stable. We can't choose a fund based on its performance. Generally speaking, the annual performance return can be stable within the top 20% of similar funds, which is more worthy of our ownership. The long-term performance ranking of the fund can also be found on the fund website every day.
