Fund investment is an investment strategy whereby a certain amount of money is invested in a specific fund at regular intervals. This type of investment is often compared to the “timing and quantity” in the financial field. In this article, we will discuss the concept of fixed investment, who it applies to, its advantages and some investment tips.
The concept of fund investment
The essence of fund investment is to buy fund shares on a regular and fixed basis. Compared with one-time investment, fixed investment diversifies the impact of market fluctuations on investment and reduces the risk of market volatility. This strategy can be viewed as a means of long-term investment, aiming to amortize costs by diversifying the timing of investment, thereby obtaining smoother investment returns in rising and falling markets.
Fund Fixed Investment is applicable to multiple people
Fund investment is applicable to several groups of people, including:
Moonlighters: For moonlighters who have large living expenses and find it difficult to have large sums of free money, fund fixed investment is a more suitable way of financial management. Through regular investment, you can gradually accumulate wealth.
Office workers: For busy office workers, fund investment saves time and effort. You don’t need to spend a lot of time to study the market, you only need to invest money at a fixed time.
Investment white: for the lack of professional investment knowledge of the investment white, fund investment is a relatively simple and easy way to invest. By choosing the right fund, you can avoid the impact of short-term market fluctuations.
People with low risk appetite or special financial needs: Fund investment is suitable for people with low risk appetite, because it reduces the impact of short-term market fluctuations on investment through regular investment. At the same time, fixed investment is also a more stable choice for people who have special capital needs in the future, such as retirement.
Advantages of fixed investment in funds
Amortization of costs: Fixed investment spreads out the cost of investment by diversifying the timing of investment so that investors can buy fund shares at relatively low prices at different market stages.
Risk smoothing: Fixed investment can reduce the impact of market volatility on the investment portfolio, enabling investors to achieve relatively smooth returns in different market environments.
Reduces Timing Hassle: Timing is a difficult part of investing. With fixed deposits, investors no longer need to predict the highs and lows of the market, reducing the difficulty of investing.
Adapt to downturns and shocks: The fixed investment strategy performs better in downturns and shocks, as the same amount of money can be used to purchase more shares of the fund in these market conditions, resulting in greater profits when the market rallies.
Choose the right fund: Not all funds are suitable for fixed investment. Equity funds and equity-biased mixed funds are more suitable for long-term fixed investment.
Make a good plan: Before starting fixed investment, set clear investment objectives, sort out their own funds, combined with risk appetite to develop a fixed investment plan, including fund selection, start time, fixed investment frequency, amount, investment period.
Adhere to long-term investment: the effect of fixed investment needs to be reflected in a longer period of time, do not be affected by short-term fluctuations, adhere to the plan for long-term investment.
Live strategy: in the ordinary fixed investment basis, you can consider the use of some strategies, such as regular irregular investment, reference averages, market value or valuation, etc., in order to respond to market changes in a more flexible manner.
Learn to take profit: When you get a certain profit, learn to take profit at the right time, choose the right way to take profit and avoid greed and excessive risk.
Fund investment is a simple and effective investment strategy, suitable for the majority of investors, especially those who wish to accumulate wealth through long-term and mitigate investment risk. By formulating a reasonable plan, choosing appropriate funds, as well as adhering to long-term investment, fund fixed investment is expected to bring investors solid returns. In the journey of investment, fixed investment may be a satisfactory “pill”.