Buy Funds or Stocks? How Should I Choose?
In Shakespeare's masterpiece, Hamlet, there is a classic line: to be, or not to be. that is a question. that is a question that has traveled through the centuries and is not in the mind of every reader. Same answer. In the psychology of many investors, there is also a constant question, the first step in investing should be to buy funds, or should be invested in stocks? It seems hard to be definitive.
(1) Handicapping analysis
Investing in stocks falls under the category of investors following the market dynamics in real time and requires investors to buy and sell all the decisions on your own Decisions, stock returns have a lot to do with the timing of the purchase. Funds, on the other hand, are entrusted to others to invest on their behalf, as the money is managed and operated by the fund's management team, and investors themselves only need to Just sit back and wait for the returns.
(2) Analysis of investment effects
Stock trading is a single operation of buying and selling, which requires a high level of personal investment experience and can be time-consuming. Cost. Fund investments are efficient because they are made by fund managers who invest in several types of financial instruments through professional research. In addition to being an effective risk diversifier, the returns are also more substantial.
The fund manager's expertise is reflected in the following areas.
Strong investment and research capabilities
The first step in buying stocks and picking assets is to do research and analysis and formulate a good strategy.
First of all, the company's internal research team, covering macro, strategy and industry in various fields, fund managers do not need to do all the research, such as he optimistic about which industry, research team to give that industry in the top excellent companies.
Secondly, the brokerage firm research services for fund companies, fund managers have a large part of the work is to participate in the various brokerage firms roadshow, every day in the mailbox there are countless sellers of research reports, this research support is not available to ordinary investors.
Finally, fund managers and listed companies can have very in-depth communication, listed companies will take the initiative to communicate with fund managers, not to exchange insider information, but the company hopes to let large investors understand its latest situation, and then through the stock price to reflect the real value of the company.
Perfect risk management and internal control process
Public funds have strict rules on stock positions, such as the "double ten" principle, which means that the ratio of a single stock to the fund's net asset value must not be More than 10%, the total number of holdings of all the funds of a fund company in a particular stock cannot exceed 10% of the total share capital of the company, which is It effectively reduces the risk of concentrated positions, and reduces the losses when "stepping on mines". The fund company's authority on the fund manager is limited, the company has a core stock pool, stocks can only be selected in the pool, significant positions. A vote through the Investment Decision Committee is required. Each stock is continuously tracked by a professional researcher who can identify risks earlier than the average investor. All of this makes the fund a much less risky product than a single stock.
Professional knowledge and experience
Not everyone in the investment industry is cut out to be a fund manager, and every fund manager is selected along the way from the Researcher to assistant fund manager to fund manager is a process of meritocracy, and the professionalism of the top performing fund manager is not can be formed in the short term. A good fund manager has experienced many rounds of bulls and bears, and has good foresight and fear of the market, which can effectively help investors to timely Transfer positions to avoid risk, but at the same time, the value-added part into realized gains.
Investing requires in-depth research, professional trading methods and strict wind control measures, without these weapons, it is equivalent to going naked into the jungle to hunt, your role has changed from hunter to prey.
(3) Practical hands-on analysis
Fund investing requires relatively little personal investment experience. Investors are usually ready to invest after analyzing a fund's historical performance, safety, and riskiness.
Stocks, on the other hand, require more investment experience, and it's very difficult to choose a top-performing stock among the many. At the same time, the stock market is changing rapidly and no one is a sure thing, so stocks can be more difficult to get started with.
Preparing for investing all requires knowledge of investing, and as investors' knowledge and skills improve, there are many who have unique insights into the stock market Investors, some of whom even start with investment funds, gradually understand the stock market and economic conditions and have the ability to invest. . If you have a strong desire to pick stocks on your own and desire to earn faster and higher returns, you can also do so on the basis of having an understanding of the stock market. The investment and manipulation of their own assets to build their own portfolio.
Whether for investors to improve their own family asset allocation, personal financial planning more scientific, or for those who do not have the time and energy to study the broader investors, investing in funds is an indispensable choice, the investment in this kind of professional things to professional people.
For investors seeking a stable return portfolio position can choose to invest in funds; if they are entry-level players learning to invest on their own. It is recommended to start with funds. Investors also need to do some initial learning to know how to pick the right funds, a skill and knowledge that is relatively simple to acquire. Also, the fund has low investment amounts, so you can officially start investing in stocks once you are familiar with it.
