Financial markets are rapidly changing, and ups and downs are the norm, especially in volatile markets, where some investors wonder: am I being targeted by mysterious forces? Why does it go down as soon as I buy it, go up as soon as I sell it, and go up all the time if I don't buy it?

In the face of market fluctuations, is there any way to make investors "calm in the face of ups and downs, hold patiently and wait for dawn"? A fixed vote is a good way to deal with it.

According to the "profit Insight of Public Equity Fund investors" launched by Jingshun Great Wall Fund, Wells Fargo Fund, BoCom Schroeder Fund and China Securities Journal, the proportion of profits and the average rate of return of fixed investment clients are higher than those of non-fixed investors. and significantly improved the profit experience.By the end of the first quarter of 2021, the average rate of return of fixed investment customers was 10.42%, about 40% higher than that of non-fixed investment customers of 7.48%.

What on earth is a fixed vote? What are the advantages? Who is suitable for? What minefields should be avoided? Let's take a look.

I. the investment method approved by the Godfather of Wall Street

Fixed investment, which usually refers to "regular fixed investment", was originally called "dollar cost averaging method".

Graham, Buffett's teacher and godfather of Wall Street, mentions the dollar cost averaging method in his book "Smart Investor": when the New York Stock Exchange promotes its "monthly purchase program," investors are required to invest the same amount of money each month to buy one or more stocks.

It is also mentioned in the book that some people have done research and said: "No matter how the securities price fluctuates, this kind of investment method can make people confidently achieve ultimate success." "

When used in fund investment, this method refers to the investment of a fixed amount to a designated fund on a daily, weekly, biweekly or monthly basis.If you choose to invest on a monthly basis, it is called "monthly contribution".

Second, the clever "lazy man's financial management skill" has many advantages.

Ding Tou is known as a smart "lazy man in financial management" because it has the advantages of relatively low risk, compound interest effect through long-term investment, low threshold for starting investment, simple operation, low timing requirements and no need to mark the market.

1. Spread the cost equally and reduce the risk in the fluctuation

Fixed investment means three fixed funds: fixed time, fixed amount of money, and fixed fund. Because the fund is calculated by share, in the case of a decline in the market, although the money invested at a single time is fixed, the price of the fund is relatively cheap and the share that can be bought is more.

For example, if it is HK $1.50, then HK $1000 can buy 666 funds and continue to invest, and when the price is HK $0.50, you can buy 2000 funds. after that, when the market rises, the price of the fund will rise to the capital recovery point and you can get a profit from selling. If this continues, the risk will be diluted.

If you start a fixed investment when you go down, stick to it at the bottom until you go up, and finally get a higher return, the resulting curve is called"smile curve" or "U curve".

Photo source: Futu

2. Make long-term investments with discipline and enjoy compound interest

People's investment decisions are easily influenced by emotions, so they may pursue a rise, stifle a fall, and eventually buy high and sell low. However, if we reduce the timing and adhere to the fixed investment strategy, it will be easier to avoid chasing the rise and fall, and accumulate long-term funds, thus enjoying the compound interest effect.

3. The threshold for starting investment is low

The starting point of fund investment is relatively low, and different banks and different funds have different restrictions on the minimum amount of investment. Some funds are 100 yuan, some are 300 yuan, and the difference in additional investment must be an integral multiple of 100 yuan.

4. Easy to operate

As long as the single investment amount, deduction account and deduction time of the fixed investment fund are set in advance, the fund can be purchased automatically. It's that simple.

Third, the vote is the most suitable for these five categories of people, see if there are you?

The fund must have so many advantages that it is a very wide range of investment methods for people. In a nutshell, it is particularly suitable but not limited to the following five categories of people:

1. People with long-term financial planning

Buy a house, buy a car, pension and children's education funds, for ordinary people are financial needs that take a long time to prepare, long-term investment is expected to enjoy the compound interest effect.

2. Investors who want to reduce risk

Fund investment through the phased investment of funds, lengthen the period of the investment fund, effectively share the cost, to a certain extent, to achieve the purpose of reducing risk.

3. Office workers who lack time and energy to study the market.

Regular deductions mean that investments will be made at different times, without frequent trading because of market fluctuations, and no need to study individual stocks very deeply. For ordinary office workers who are usually very busy but have a fixed income every month, it saves more time and effort.

4. New financial personnel with less investment experience

Fund investment will reduce the pressure of timing for newcomers with less investment experience. And with the help of the fund managers of the world's top asset management companies, financial newcomers can also invest more confidently and patiently, and have more time and energy to learn investment knowledge, thus having the opportunity to become financial experts.

5. The "moonlight clan" who need to save

Fixed investment plays the role of compulsory savings, set aside a little money every month to invest, add up, no longer be a "moonlight clan."

Fourth, avoid the five minefields and have a correct understanding of the fixed investment.

Of course, fixed investment is only one of the many investment strategies, and it is not perfect. If you see the myth of fixed investment as "steady gain" and "wealth freedom", you must be careful.

Let's take a look at some common "minefields".

1. A fixed vote is the best strategy, which is definitely better than "a shuttle"?

According to the research of Sino-Thai Securities, if the market situation is simplified to four situations:

• First fall and then rise: the discipline of fixed investment can help investors overcome the fear of bear market decline and bull market fear of heights; one-time investment is difficult to determine a reasonable time to enter the market.

• Unilateral decline: fixed investment can gradually reduce the cumulative share of Jiancang cost; after one-time investment, Jiancang cost is fixed, cost recovery time is long, and uncertainty is high.

• Unilateral rising market: fixed investment in batches to buy, Jiancang cost is higher than one-time investment.

• Concussive market: fixed investment can smooth Jiancang cost and ensure investment discipline; the performance of one-time investment is greatly affected by market fluctuations.

That is to say,Fixed investment is more suitable for falling and then rising, unilateral falling and concussive market than one-time investment."A shuttle" is more suitable for unilateral rising prices, but it requires higher ability to judge market trends.

Of course, there is no best strategy, only suitable or not suitable for their own strategy. If you are not willing to take the huge risk of timing, honestly choose the strategy that suits you and have a reasonable expectation of income.

2. Stop investing as soon as the market falls?

Market fluctuations often discourage people from continuing to vote. If you can't predict the direction of the market wind, you should still consider sticking to the low level, getting more chips at a low cost, and gain more when the market rises.

3. Does a fixed investment mean a steady profit and no loss?

If you choose a fund that does not perform well for a long time, or if you encounter a long-term bad market situation, you are bound to lose money. Choosing a fixed investment does not mean to be a "cashier". We should still keep abreast of the fund and market trends on a regular basis. If you find that you have chosen the wrong fund, you can carefully consider transferring to another fund at the right time. If after research, it is found that it is not the problem of the fund, but mainly because of market fluctuations, then we should stick to it.

4. The more money you put in each time, the better?

Investment should be done according to your ability, and the amount of money at a single time depends on your goal and the amount of money you have. If the fixed investment amount is set too high at the beginning, it is easy to run out of funds and interrupt the investment plan.

5. The longer the investment time, the better?

The longer the fixed investment time, the better. With the extension of the fixed investment time, when the accumulated principal is enough, the impact of each investment on the whole becomes smaller and smaller, and the impact on reducing the average cost becomes smaller and smaller. Proper control of profits is also an effective way to improve overall earnings.

As for how to choose the fixed investment fund and how to stop the profit, we will explain it later.