Five types of assets that ordinary people can access:
1. Stocks: stocks, stock funds, joint-stock companies
2. Bonds: bonds, bond funds, savings, bank wealth management
3. Currency: currency funds, fire savings, reverse repurchase
4. Real estate: houses, real estate trust funds
5. Human assets: a job
We mainly discuss the first three
In terms of long-term benefits, there are obviously
benefits: stocks>bonds>currency,
but the risks are also: stocks>bonds>currency
Cash will be eroded by inflation, and the purchasing power of cash will decline every year. This is what we often say about devaluation, so I won’t say what it means. To ensure a benefit rate of more than 10% every year can offset inflation and even make money.
Long-term yields of three types of assets in China: (data a few years ago)
stock assets; 14.11%
bond assets: 6.40%
currency assets: 2.56%
The 4% rule.
This law is the profit proposed in 1994 by MIT scholar William Bangan. That is, by investing in a group of assets, withdrawing no more than 4% of the amount from the pension every year to pay for life needs, until the death of oneself, the pension will not be spent, because the assets themselves will increase in value. If you need 300,000 yuan in expenses a year, you need to save 7.5 million in assets. Withdrawing no more than 4% each year can meet the living expenses of 300,000 yuan a year and realize financial freedom.
The concept
of a fund is simple to understand: a fund is an investment tool, which means that everyone's money is handed over to a professional fund company to take care of it. Yu'E Bao is a currency fund.
There are many types of funds.
For example: public equity funds, pension funds, national sovereign funds, private equity funds, social security funds.
We mainly discuss public funds.
Funds can easily diversify risks. Hand over to the fund to invest: automatic investment and dozens or even hundreds of stocks.
For example: buying CSI 300 index fund = buying 300 different stocks at the same time
The three most commonly used types of funds:
currency funds: invest in bank deposits, short-term bonds and other products, with low risk but low returns.
Bond funds: If the fund invests in various bonds, it is a bond fund. Bond funds have more than 80% investment in bonds. If it is issued by the state, it is a national debt. Corporate issuance is corporate bonds. The risk is medium, the return is medium.
Stock funds: A fund that invests in stocks is a stock fund. More than 80% of the funds are invested in stocks. The profit is the highest but the risk is also the highest.
The investment cycle of different funds:
currency funds can be used as you go.
Bond funds are best held for more than half a year.
Stock funds can be held for more than three years.
Generally speaking, the longer the stock fund is held, the lower the loss and the lower the expected return.
Warren Buffett recommends index funds
Index Fund (Index Fund), as the name implies, is based on a specific index (such as the Shanghai and Shenzhen 300 Index, the S&P 500 Index, the Nasdaq 100 Index, the Nikkei 225 Index, etc.), and the constituent stocks of the index are used as investments The target is a fund product that builds an investment portfolio by purchasing all or part of the constituent stocks of the index to track the performance of the underlying index.
Generally speaking, the purpose of index funds is to reduce tracking errors, so that the change trend of the investment portfolio is consistent with the underlying index, so as to obtain roughly the same rate of return as the underlying index.
The difference between index funds and stock funds:
Index funds use passive investment, select an index as the target of imitation, and purchase all or part of the securities in the securities market included in the index according to the index composition standard, with the purpose of obtaining the index The same level of income.
The investment method provided by index funds is the most convenient and simple. Investors do not need to worry about whether the fund manager will change the investment strategy, because index fund managers do not need to choose stocks by themselves, so it doesn't matter who is the fund manager.
The biggest advantage of investing in index funds is the lower cost. Since index fund managers do not need to actively select stocks, the management fees of index funds are relatively low. At the same time, because index funds have adopted a buy-and-hold strategy and do not need to exchange shares frequently, the commission and other transaction costs incurred when the fund buys and sells securities are also far lower than those of actively managed funds.
On the other hand, stock funds are actively managed funds with active investment. More than 80% of fund assets are invested in stocks. They are equity funds. Fund managers invest in their own unique ways instead of selecting stocks based on indexes. The investment risk is higher than other funds. Choosing a stock fund means that you must fully trust the ability of the fund manager.
Three advantages of index funds:
1. Immortality
Index can achieve immortality by absorbing new companies and replacing old ones. However, ordinary stock funds cannot achieve immortality.
2. Long-term rise
3. Low rates
To buy an index fund is to buy a national fortune. As long as the national economy develops normally, index funds can rise for a long time.
Buying index funds = buying a basket of stocks
Index funds have a long life and there is no black swan risk.
Fund Code: Fund’s "ID Card Number"
Fund Net Value: The market value of a fund
