Fund as a relatively low-risk profitable assets, often favored by novice investors, skilled investors also often need to be selected as an important part of the asset allocation, but with more and more funds on the market, the selection of funds has become one of the problems of many investors, so this article focuses on how fund managers select funds, as well as their fund investment strategy to analyze for individual This article therefore focuses on how fund managers select funds and their fund investment strategies for individual investors' reference.
When investing in funds, diversification is the basis of investment. Historically distinguished fund managers have analyzed the risks of fund investment and recommended that individual ordinary investors should not invest in only one fund, as a single fund may encounter several consecutive years where its style is not consistent with the dominant market direction, resulting in not obtaining the average market profitability. A comprehensive allocation of funds with multiple styles should be combined with the goal of adding value in a steady manner, which is more conducive to smoothly weathering different investment market environments. Therefore, a broad style classification for the fund is more conducive to the next step of investment fund planning, and this paper divides the fund into five main types.
(1) Balanced style
Balanced style, mainly refers to the fund manager is not limited to the type of fund, not bound to a specific investment philosophy, focus on the selection of low valuation and high growth companies, more from the asset value for money considerations, if a class of assets cost-effective, will be allocated in it. Balanced style is more suitable for investors who focus on long-term investment, which means that there are few cases of particularly good annual performance, but in the long run the return will be higher.
(2) Value style
Value style, mainly refers to the selection of investment objects based on the asset value and valuation of the company, choosing varieties that are undervalued by the market, which can also be called deep value style. Balanced style is more suitable for investors who expect to earn profits in the short term, and is characterized by a high proportion of traditional industries and strong profitability. You need to wait for a company to be undervalued by the market to buy, and then wait until it returns to normal value or is overvalued to sell and make large gains.
(3) Growth value style
Growth value style, mainly invests only in stocks with stable industry position, which have good growth and stable earnings growth rate. Growth value style funds gain mainly from the growth of the companies themselves and the growth of profits, so they are more suitable for investing when the overall investment industry is declining and the economic cycle is in the doldrums, and will gain good returns.
(4) Emerging Growth Style
Emerging growth style, as its name means, mainly refers to investment in emerging industries, more focus on the growth of the industry, generally is the industry's earnings, revenue has a high growth rate, the industry is in the development stage. Emerging growth style is more suitable for the industry development more understanding, and a certain gambling nature of the investment, the risk is greater, but once successful, the profit is also equally large.
(5) Special event funds
Special event funds are investments in companies that experience certain events that change the company's future prospects, such as cash flow failures, restructuring, mergers, bankruptcies or other crises. These crises can cause a company to sell off some of its investments, and the pressure to sell can cause it to become undervalued and buy to be able to make a large profit.
In general, the investment market is ever-changing, and the funds with good returns will keep changing at each stage. And if you wish to earn stable profits in the fund market, you can divide your investment capital into multiple parts and invest separately in funds of balanced style, value style, growth value style, emerging growth style, and special events, which can effectively reduce risks while adapting to different market environments.
