This sentence applies to any investment, unless you put all your money in the bank, but that is not an investment. This sentence is to tell people who are going to invest that although investment projects such as stocks have high returns, they also have high risks. Think twice before you inject funds. Don't blindly invest in others. You know, risk and reward are directly proportional.
In the dimension of credit risk, products can bear the risks of credit subjects at all levels. In the dimension of market risk, products can be fully invested in various highly volatile financial products such as stocks, foreign exchange and commodities. , and can invest and operate through leverage amplification such as derivative transactions and stratification.
Advantages of the fund:
Collective investment fund is an investment method: it skillfully gathers scattered funds and gives them to professional institutions to invest in various financial instruments, so as to realize asset appreciation.
Diversified risk funds can diversify their portfolios and invest in various securities. By diversifying investment, on the one hand, the advantages of huge capital and numerous investors are used to reduce the investment risks faced by each investor, on the other hand, the complementarity between different investment objects is used to achieve the purpose of diversifying investment risks.
The expert management fund implements the expert management system, and these professional managers have been specially trained and have rich investment experience in securities investment and other projects.
Shortcomings of the fund: the shortcomings of the fund are mainly risks, which mainly come from:
Credit risk: including the credit risk of bonds, bills and other instruments invested by the fund itself, as well as the door-to-door risk of investment based on transactions, such as repurchase agreements.
Market exposure risk: market exposure risk refers to the actual market value of money market funds, that is, the risk of deviation between the net value of funds valued by market method and the transaction price of funds, usually the face value of funds.
Policy risk: Changes in national macro policies, such as fiscal policy, monetary policy, industrial policy, regional development policy, etc., lead to market price fluctuations, affect fund returns, and generate risks.
Economic cycle risk: With the cyclical change of economic operation, the income level of the securities market also changes periodically, and the income level of fund investment will also change accordingly, resulting in risks.
Interest rate risk: the fluctuation of interest rate in financial market will lead to the change of price and yield in securities market. Interest rate directly affects the price and yield of bonds and the financing cost and profit of enterprises. The fund invests in bonds and stocks, and its income level may be affected by changes in interest rates.
Operational risk of listed companies: The operational status of listed companies is influenced by many factors, such as management ability, industry competition, market prospect, technological update, financial status, new product research and development, etc. All these will lead to changes in the company's profits. If the listed company invested by the fund is not well managed, its share price may fall, or the profit available for distribution may decrease, thus reducing the investment income of the fund. Listed companies may also undergo unpredictable changes. Although the fund can disperse this unsystematic risk through diversification, it cannot be completely avoided.
Inflation risk: the purpose of fund investment is to preserve and increase the value of fund assets. If inflation occurs, the income of the fund's investment in securities may be offset by inflation, thus affecting the preservation and appreciation of the fund's assets.