Stock fund: the long-term investment is the best strategy [favorites]

If you do not have a ten-year reserve for a stock, do not hold it for ten minutes.
-- Investment master Warren Buffett

We often say that stocks are high-risk, high-reward investment tools. Likewise, it can be proved that stock funds also have high-risk and high-reward features and are suitable for long-term investment. In stock fund, it can be further subdivided into small categories such as positive growth, growth, growth income, and stock income fund. In the Fund terminology, "Growth" refers to the primary objective of fund investment to obtain capital gains (that is, the price difference) from stocks, and secondary to the existence of dividend distribution.

"Income" refers to the dividend distributed by the stock. Growth income is a fund that balances both capital gains and dividend income. In the stock-return model, the investment distributes the stock with high dividends stably. In general, the price of growth stock funds fluctuates greatly, but the long-term average return rate is relatively high; the return rate of income stock funds is relatively stable, but the average return is relatively low.

Another more systematic classification method is to divide stocks into large-sized stocks, medium-sized stocks, and Small-sized stocks according to their large-sized communities; then, the stock is divided into growth stock, value-type stock, and hybrid stock based on the book value ratio of the current market price. If the two classification methods are combined, there are 3 × 3 = 9 combinations. In general, growth stocks refer to stocks with a higher book value than the current market price and a lower dividend distribution rate. Investment strategies focus on the company's development prospects and belong to "better companies in the future "; however, the book value of a value stock is relatively low in cost-to-benefit ratio and market price, and the dividend distribution rate is relatively high. The investment strategy focuses on the relationship between the stock market price and the internal value of the stock, investing in companies with "the performance of stock prices is determined and the future should not be so bad. "Table 4-3 shows the proportion and risk level of American general stock funds in these nine combinations.

To be honest, stock-based funds should not significantly reduce their shareholding ratio even if they look empty, because fund investors are optimistic about the market to buy funds, and fund managers should not do the opposite. The job of fund managers should be to choose a good stock so that the Fund can have a better performance than the market. If it is a dynamic asset Adjustment Fund (dynamic asset allocation), or a balance fund is a flexible stock adjustment, bond proportion (flexible policy), or hedge fund, in their open statement, they all explain that fund managers will greatly adjust their shareholding ratios based on their views on the market prospects. Timing actions should be what these funds have clearly recorded in the public statement. Stock-based funds are limited by investment targets, so it is not advisable to make large guesses about the market.