The methods for novices to buy funds and manage their finances are as follows:
1. Buy funds based on their names. Many investors will judge the fund style based on the fund names. In fact, the fund name is just a name. Fund companies take great pains when choosing names. Value, growth, selection, emerging, valuation, etc. are words that appear frequently. These names give investors some good hints. Many investors will judge the fund's holding style based on the name of the fund, such as whether it is large cap or small cap, growth or value. In fact, except for funds that passively track indexes, the names of actively managed funds reveal little information.
2. When buying a fund based on historical performance, the first thing many investors look at when buying a fund is the fund’s historical performance, such as the annualized income in the past three years and the income in the past three months. In fact, the fund's historical performance prediction ability is not that strong. It is true that the historical performance of a fund is an important reference, but the return rate of buying a fund based only on historical performance is very low.
3. The fund company has strong strength and long operating time. When buying a fund, you must first check the strength of the company and how long it has been in business. Just like looking for a husband, you must look for someone with a good family background.
4. Only invest in index funds that strictly track the market. Buffett has recommended index funds to ordinary investors in public. The reason is that index funds are passive investments, transparent holdings, low fees and long-term returns. No worse than some actively managed funds with high fees. In fact, Buffett is talking about a very efficient and long-term slow bull market like the United States, while the Chinese market is completely different. The Nasdaq index has increased nearly 6 times since 2009. There are very few active funds that can beat this index in the long term. Index funds with low fees are of course the best choice.
5. Buy funds that suit you. When purchasing funds, you should choose open-end, closed-end, high-risk, low-risk, combination, stock, etc. according to your own situation.
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