Why do many people do not buy more when the bottom pulls up, but dare to buy after a small drop?

The subject of the question asks: Why do many people do not buy more when the bottom pulls up, but dare to buy after a small drop? Pay attention to the core key words: after a lot of rise, a small drop first rises a lot, and then buy again. . In fact, it is essentially chasing the rise. The psychology of many retail fund investors is like this. When the fund is at the bottom, they have not dared to buy. The market suddenly rises, and the bottom starts to rise. They hesitate to start, and want to wait for another drop. Unexpectedly, the follow-up funds soared all the way, and retail investors who missed the opportunity to enter the market rushed to beat their thighs. After hesitating for a long time, I happened to encounter a small drop, thinking that I could not miss the last opportunity to make money, so I rushed to buy.

Looking at a set of data first, the length of the blue tree diagram in the figure above represents the purchase volume of the fund. You can clearly see that everyone is buying frantically in the bull market, and almost no one is interested in funds during the bear market. The consequences of this kind of chasing ups and downs are very terrible. When funds have been making money, most of them are in the late stage of the bull market. At this time, chasing the rise and the fall can only step on the high point. Buying is more expensive than most of the time, so the final outcome can only be a loss.

Fund purchase rates are mostly low, as long as 0.15% or 0.1%. After all, no one sets a threshold for spending money. However, buying funds is for long-term investment. To prevent short-term speculation, officials directly impose restrictions on the rate. The shorter the holding time, the higher the selling threshold, which implies that our investment funds must be held firmly and guarded against arrogance and rashness. It is a pity that many people are making short-term investments while complaining about the high rates and costs, and they cannot understand the good intentions behind the supervision…

Hold less than 7 days, the rate is 1.5%. This is the punitive rate specified in the text. Hold for more than 7 days, the rate is reduced to 0.5%. The longer you hold, the lower the rate. Let’s calculate an account for everyone, assuming the cost is 10,000 yuan. Fast in and out within 7 days, the rate is 0.1%+1.5%, the cost is calculated alone, and 160 yuan will be given to the fund company for one operation. Repeated for a month, the cost is 640 yuan, and the gas money for the two SUVs is gone. Be a little more patient, hold for more than 7 days and sell at a rate of 0.1%+0.5%. The cost is calculated alone and 60 yuan will be given to the fund company for one operation. Repeat for one month, the cost is 180 yuan, and half of the cigarette money is gone. Repeated for one year, the loss of principal exceeded 20%… How many retail investors can guarantee that their annualization can exceed 20%? The most fatal thing is that the annualized 20% only covers the cost of the loss, and if you want to make money, you have to annualize more than 30%. Buffett could not achieve this goal!

loveyou

By loveyou

0 0 vote
Article Rating
Subscribe
Notify of
guest
11 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
helpmekim
8 months ago

The copyright belongs to the author. For commercial reprints, please contact the author for authorization. For non-commercial reprints, please indicate the source.

The low drawdown rate is the historical volatility of the fund. For an ordinary retail investor who uses the money to move bricks as an investment, he can’t bear the fluctuations of one up and down. Investment volatility, especially when the decline rate is 10%-30%, many people will have anxiety; when the decline rate is 30%-50%, more than 70% of people will have anxiety, even extreme anxiety, and rush Stop loss. So, choose back Funds with a withdrawal rate of less than 30% are suitable for most investors. If you are more conservative, you can reduce it to less than 20%. However, it should be noted that the retracement rate also includes the probability of rising in a short period of time. A strict retracement rate will reduce the growth rate of earnings and take longer.

Last edited 8 months ago by helpmekim
heloword
8 months ago

The size of the fund is over 500 million. Since the salaries of fund managers, researchers, auditors and other related staff are not cheap, and the scale of the fund is too small, the costs and expenditures shared by each investor will increase, and the gains will outweigh the losses. But too big is not good. If the size of the fund exceeds 10 billion, it will make fund managers need to allocate more stocks. There are not many high-quality A-share stocks, and it is inevitable for fund managers to ignore some quality in pursuit of quantity. Buying stocks with average performance makes it more difficult to control income. ② The fund has been established for more than 3 years. The fund’s establishment time is too short, and the performance has not yet been made. We have no way to judge the quality of fund managers. The short-term gains are high, and there is likely to be luck.

helpyme
8 months ago

Choosing mature fund managers After the above three points, the scope of the fund has been greatly reduced. The next step is to see who the fund managers are behind them. Investment is not just a matter of fact, it must be done in the market and tested in order to achieve success. Although all fund managers are graduates from prestigious schools and have a large number of masters and doctors, no matter how good the quantitative model is, it is necessary to practice to learn. The domestic stock market has a bull and bear market cycle in 4-5 years. It is reliable to choose fund managers who have been in the business for more than 5 years and have experienced bulls and bears. In addition, it depends on his historical performance. After the bull and bear market, there can still be an annualized return of more than 15%, indicating that its success does not depend on luck. Based on the above four conditions, we can carry out preliminary screening.

sina156
8 months ago

Check the award-winning fund managers are often well received in the industry, the most important basis is the number of awards. Good fund managers are always soft when they get prizes. There are three major fund-related awards in China: ① China Fund Golden Bull Award ② China Golden Fund Award ③ China Fund Industry Star Fund Award These are all official awards of the Fund Association. Most recognized outstanding funds and fund managers are frequent visitors of these awards . In addition, there is Morningstar Fund Network, a third-party independent institution from the United States, which selects the annual fund award every year. You can also check fund ratings on this website. Funds with good returns will be on the list.

yahoo898
8 months ago

Kweichow Moutai: I started buying in 2006 when the position was opened, and the price was around RMB 13 at that time. Since then, the proportion of heavy positions has been adjusted, and it is still held until now. The current price of Moutai is 1,685 yuan, which has risen nearly 130 times. Hengrui Medicine: It started holding in early 2014, and the price was around RMB 9 at that time. After holding for two years and exiting the heavy position, the price was about 25 yuan, which was nearly three times higher. China Merchants Bank: In 2006, the position was opened and the price was about 2.5 yuan. Until the beginning of 2019, when the heavy warehouse exited, the price was about 34 yuan, which was a nearly 14-fold increase. Similar examples include Yili shares and Ping An of China. Every time I look at the trend of baijiu, many people should imagine: If I had restocked Maotai 15 years ago, then my current income would be… Many years ago, Zhu Shaoxing was doing this, and now his income is beyond the reach. Why do retail investors refuse to make money for us?

leexin
8 months ago

The copyright belongs to the author. For commercial reprints, please contact the author for authorization. For non-commercial reprints, please indicate the source.

Fu Youxing has worked in public equity for 18 years and worked as a fund researcher for nearly 10 years in his early years. He has rich experience and strong analytical skills. He has only become a fund manager in the last 7 years and has strong risk control capabilities. GF has grown steadily since he took office, with a maximum drawdown rate of 27.64% and an annualized volatility of 14.96%. In the same period, the maximum retracement rate of the CSI 300 was 46.7%, and the annualized volatility was 22.88%. In comparison, Fu Youxing’s retracement rate is 19 points lower, and the annual volatility is 8 points lower! It specializes in all kinds of investors who are worried and afraid. Buying is just lying bullish! He used about 50% of his position to invest in bonds and the remaining 50% to buy stocks, which was able to significantly outperform the CSI 300 Index.

strongman
8 months ago

Wang Chong has been in the industry for 12 years and has been a fund manager for nearly 6 years. He is the longest in the industry among the three and the winner of the “Golden Bull Award” for three consecutive years. The winning fund is the Bank of Communications New Growth Hybrid Fund, which has experienced a complete bull and bear market around 2015 and can achieve an average annualization rate of nearly 30%! Wang Chong’s main idea is to make reverse investment and long-term returns. In addition, he prefers the biopharmaceutical industry, buying leading companies in the segment, and obtaining excess returns through the rise of a single stock. Do not chase hot industries, diversify investment, pay attention to the withdrawal rate, is the most stable player of the three.

stockin
8 months ago

After the epidemic, the entertainment industry may usher in a rebound, which is very likely to continue to bring good benefits to Yang Hao. In terms of investment style, Yang Hao has mostly small-cap stocks and fewer large-cap stocks. In order to stabilize the retracement rate, Yang Hao also allocates many bonds. Yang Hao has two funds in hand, the Bank of Communications pays double interest balance regularly, and the flexible allocation of the vitality of the Bank of Communications new students, both of which are close to 30% annually. In particular, the new vitality of Bank of Communications has had a return rate of over 80% in the past year. In recent months, Yang Hao has also developed two related funds based on his advantages in technology stocks, and has won nearly 8 billion in investment in one fell swoop. Among them, BOCOM’s kernel-driven hybrid trend seems to be good, but it has only been established for less than a year, and it is still too young for a fund. Interested friends can let the performance fly for a while. Limited space only analyzes a few particularly representative bigwigs. If you are interested, I will pick a few fund managers later to talk about the investment legends of these stock gods. In the end, if you want to buy the funds of these big guys, you must be able to hold it!

zhiwo
8 months ago

I now hold more than 2 million fund positions and earn more than 400,000 yuan. Along the way, I know my friends’ confusion. Based on my real experience, don’t ask around, look at some fragmented knowledge. Believe me, spend an hour patiently and study the above complete guides carefully, and the fund will be able to learn basically. I will update the fund firm offer every week. The firm offer is fully operated according to the guide, and the firm offer can make all theories fall. Everyone may wish to follow the firm offer to practice. You can never learn to swim without getting into the water. After a round of ups and downs, if you really make money, you will fully understand the fund. This is the fastest and fastest way, and it is also my real experience in actual combat.

greatword
8 months ago

I also invested in a fund. Others made a lot of money, but I was in a mess. Why?

Could it be that the fund I bought is fake?

I found the best fund manager in the market and bought the best fund in the past. Why did I lose 30% after half a year in my hands?

Is the historical performance of fund managers all packaged?

Buying funds can only rely on luck?

11
0
Would love your thoughts, please comment.x
()
x