5 Reasons to Only Invest in ETF Funds
1.Analysis of listed companies is not simple
When it comes to stock investing, there's no getting around Buffett these days. Mr. Ba's experience of buying Coca-Cola has been touted by many people and has given many retail investors the illusion - picking cattle stocks like Warren Buffett. It's the easy part.
But is it really that easy? Mr. Buffett, Sr., studied business at the University of Pennsylvania and finance at Columbia University under Graham, a value investor. Masters, though not a PhD, also ensures that his master's has a rigorous training in science-based finance. In addition, Buffett has been sensitive to numbers since childhood, and his ability to analyze company issues is not something that ordinary people like us can match.
What's more, the analytical logic of a pharmaceutical company and a TMT company is completely different. Easy. Anyway, people like me, who continued to spend three years getting the CFA (Chartered Financial Analyst) out of the door, can't say that on analyzing businesses Handy.
Buffett's greatness lies in his pragmatism. You see, he never recommends index fund investments to the average investor, rather than advising them to invest in stocks themselves.
2.Diversification of profit models
In stock trading, the profit model is still relatively simple, mainly just holding shares and waiting for them to rise.
In contrast, the fund's structure is complex, and consequently there are more profitable models besides the fund's share holdings rising.
With ETFs or graded funds, for example, you can buy and redeem to get a spread between the NAV and the price out of sync
3.Partial restrictions may be circumvented
Right now, the market still has quite a few trading restrictions, and using a good variety of funds can help you curve around them.
For example, right now you buy individual stocks of the ChiNext, it is necessary to open the privileges of the ChiNext. If you are too busy at work to open the permission but also gluttonous for the crazy growth of the ChiNext, then you can use the ChiNext ETF or the The GEM grading fund killed, completely free from the restrictions of the GEM authority.
Another example is the financing and financing of securities, although the threshold has been lowered again and again, but without a 100,000 200,000, I'm afraid that the brokerage firms will still not provide you with this business. of - and the financing is not only high interest rates, but also extremely inconvenient to use. In contrast, tiered funds achieve leverage by borrowing internally from Tier B to Tier A (currently initially 2x), not only is the cost of borrowing Usually 6-7% lower than the financing business, and the threshold is very low, 100 shares of graded B can participate.
4.Exemption from stamp duty and low investment cost
Bogle, the originator of index funds, said well, what you save is what you earn.
A key advantage of fund investing, at the moment, over direct stock trading is the exemption from stamp duty.
Although the bar, the management of the stamp duty is now a drop again and again, only need to unilaterally charge 1 per thousand, is the peak in 2007 bilateral 3 per thousand only six, but considering the brokerage commission is also a drop again and again, this part of the cost is still not to be underestimated.
The current brokerage commission level of three thousand for example, a buy and sell is 0.6‰, but at the same time you have to pay 1‰ stamp duty, making the The total transaction cost becomes 1.6 per 1,000 - and that's 62.50% of the stamp duty.
As the stock market continues to go crazy in the future, we can't rule out the possibility that management will continue to raise stamp duty, which will put even more pressure on this piece of taxation. And with traded funds, whether ETFs or graded funds, you don't have to worry about stamp duty - every time you start, you win over the stock speculators! With 1‰, we can hope to gain a significant advantage over the rest of the world.
5.More exciting than the stock market
The financial markets are huge and you should look beyond the stock market.
In my opinion, the biggest advantage of a fund as an investment vehicle is that it provides you with options other than stocks.
Remember, modern asset portfolio theory tells us that investment performance is 90% dependent on the assets you hold.
