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Zhi Finance » How to make rational diversified investment with retirement savings?

How to make rational diversified investment with retirement savings?

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Diversification is the key to successful investment; This is particularly important for those who save money for the elderly. After reading this passage, you will understand: What is diversity? Why is diversity important to you and your family? How to easily diversify the needs of the portfolio?

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Other Article: How to make rational diversified investment with retirement savings?

Diversified investment refers to that when investing, the capital is dispersed into such asset categories as stocks, bonds and real estate, and then various investments are made in these categories.

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Diversified investment is very important, because if you are not careful about investment management, it may lead to different types of investments flowing in the same direction at the same time, which is no different from choosing a single investment that is easier to manage.

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  • 1. Investment funds. Investing in public funds or exchange traded funds (ETFs for short) can only enable you to diversify in a specific asset class, but cannot diversify in different asset classes. Take the “low market value growth fund” as an example. Its investment targets are small growth enterprises, mainly injecting technology stocks. Even if such funds seem to inject more than one stock, because most enterprises are similar in type, they face similar risks and perform similarly in economic fluctuations and competition.
  • 2. Invest in multiple categories of funds. To make investment more diversified, we need to invest in different types of funds. Don’t invest your money in five types of low market value growth funds; Distribute the money to different fund varieties to achieve their respective strategic goals.
  • 3. Invest in stock and bond funds. To maximize investment diversification, we need to invest in both stock and bond funds. In the long run, the return of stock funds is often higher, but the swing is also greater. Bond funds are more stable, and sometimes appreciate when the economy is depressed or the stock price falls; When the economy improves and the stock price rises, its increase lags behind the interest rate, and the income is low.
  • 4. Be cautious of investing in stocks as a retail investor. Those who like to speculate in stocks directly will find it more interesting than investing in public funds. Generally speaking, it is difficult for individual shareholders to surpass the overall performance of professional fund managers or the stock market. If you want to directly invest in stocks, you should also make it account for a small proportion in the overall portfolio. Don’t trade too often. Once the financial products are purchased, they will be held for a long time. To maximize the diversification of stock portfolio, you can try to buy at least 12 stocks in different fields or industries.
  • 5. Don’t buy bonds, buy bond funds. Direct holding of bonds will add management burden and logistics problems, and most individual investors will try to avoid them. Unlike stocks that last forever, bonds will be paid off when they mature. Then, we must invest again, and we need to do a new round of research. As with stock investment, in order to achieve diversification, we must always pay attention to the bond portfolio. By purchasing two or three types of bond funds to achieve different strategic goals, we can diversify bond investment and simplify the workload.
  • 6. Allocate the investment proportion of stocks and funds, and adjust the risks and returns of the portfolio. The more stocks you hold, the greater the risk and return of your portfolio in the long run. The advice for the most adventurous investors is: buy a certain amount of bond funds to balance risks. Your long-term income is low, but more stable. As you get older, you should invest more in bonds. Now, most of the consultants have suggested that even if they retire, they should also take stock speculation (often indirectly through public funds) as the main source of retirement savings. If you can live beyond 100 years old, your money must be able to maintain its value for a long time. It requires ideal and stable income. The only option is to combine stocks and bonds.

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It is difficult to invest in saving pensions, but as long as you spend some time learning, you can master important and basic concepts and avoid unnecessary risks in your portfolio.