Master two index funds, Zhang Kun, Ge LAN, Xie Zhiyu are not your opponent

2022-05-20 0 By

A wide base index, a lot of people are sniffy: so no technical content of the play, only suitable for small white!But in fact, as long as you can skillfully play two index funds, 98% of the fund managers are your defeat!How is that possible?Many investors and basic people master all kinds of skills, it is ok to show off skills, but to really take out 5 years, 10 years of earnings.Not a lot of them are making money.What are these two exponents?Say to frighten you jump, is the most common Sse 50 and gem.A lot of net friends will sneer: gem can also see, Sse 50?Hum!A handful of bank stocks? That’s not fun.Let’s play a game and see what happens.What is the level of annualized income 20% in ten years?I screened funds with annualized returns of 20% or more over the last decade.There were only 24 of them!What you mean?Now we have more than 9,600 funds, and only 24 of them have achieved a 10-year annualized return of more than 20%. That’s 2.5 out of 1,000 funds.Even back in 2012, there were just over 1,000 funds.There is only a 2% chance of picking a bull B fund.In other words, as long as you can achieve a yield of more than 20%, you are a super bull B investor.Can two index funds beat top managers?Next, I will show you how to achieve this rate of return using sse 50 and GEM.For comparison, I use xingquan Herun, the star fund.The chart below shows the annual returns of the three funds from 2011 to the present.Suppose we switch between sse 50 and GEM every year.We’ll pick whoever did well back then.For example, gem was used in 2011, SSE 50 in 2012, GEM again in 2013, and so on.Let’s say the initial investment is $1 million, and what do you think it’s going to be over 11 years?That’s 13.28 million!If you use Xingquanherun, the final profit is less than 5 million.The annualized return rate of the two indices switching back and forth is 26.5%, and the annualized return rate of Xingquan Herun in the past decade is 24.2!See, this is what I’m saying, as long as you play with these two indices, you can dominate the fund industry.Are you surprised?So it sounds like the index is such a cow B.I study so many difficult skills every day, completely lost to the two indexes.Why is that?If you look closely at the comparison chart of the three funds above, even a one-in-a-million active fund would struggle to beat both indexes in a given year.Behind this lies a factor that many people overlook.The SSE 50 represents a typical value stock, while the GEM represents a typical growth stock.As long as you can play with the wheel of value and growth, you are a great loser!Recall, a lot of financial management small white, one enters the field to buy fund to pick industry fund specially.If you can’t even play with the index, you’re going to take on industry funds and not lose money.Many people think they have a finger in the pulse of the stock market and can pinpoint the sectors that are doing best that year.This is just wishful thinking.As an old bird, I can’t even accurately grasp the value and growth of the switch, but you still want to accurately switch in more than 30 industries.Think how ridiculous that is.Some time ago, AFTER I showed you my asset allocation portfolio, many of my fans still felt confident enough to choose industry funds.Why?Well, it’s because most of my configuration is exponential.It’s so tacky.But investing is about making money, not looking for good posture.Who cares how good your posture is as long as you make the money?So, everyone is still a bit pragmatic, you can figure out the two indexes, is already ten thousand in all ace ace high ace!And I have five exponents in my portfolio.It’s not easy to steer.Four, what is the case with industry fund?I included four sector indices, but only because I saw a definite opportunity.Otherwise, I wouldn’t touch a sector fund.In my portfolio, indexes and bonds are the main players, and they do the right thing.Industry fund is a strange soldier, is the occurrence of a rare opportunity when the surprise victory.And there aren’t many of them in the market.For example, China Concept Interconnection last year, as well as low valuation plate banking and insurance.Why do so many people get caught up in medicine? Because they’re too eager to do something.You have to be a patient investor. Don’t make an investment unless you’re 80% sure.Play with the index can become immortal, but also what bicycle?Oh, and just to be clear, I can’t switch between sse 50 and GEM perfectly myself.I don’t think there’s a soul in the world!Five, active fund or industry fund is good?Many netizens have asked me this question: Why don’t you use active funds?People may not have enough investment knowledge and assume that active funds run by fund managers will perform better.Not really.The game above illustrates the problem.There are five reasons why the best managers use passive funds to allocate. 1. We trust ourselves more and don’t want managers to mess with our allocations.If you leave it to fund managers, you can’t allocate the right ratio of value to growth.Not to mention the distinction between large and small plates and the industry.For example, I want to allocate 5% of new energy. If I use active funds, I cannot achieve this precise proportion.2. We can’t control the fund manager’s behavior, in case he leaves his job, violates the rules, lifts the sedan chair, shifts his style, dies, expands his scale, encounters the large redemption, etc., that can be in trouble.3. Each fund manager is mostly familiar with their own field and style, when the market is not in their style, they may be sideways for several years, ordinary investors absolutely do not have the patience to spend.And I do my own portfolio, can ensure that most years are profitable, so that the state of mind will be good.4. Management fees for active funds can range from 1 per cent to 1.5 per cent, while fees for passive funds are typically less than 0.5 per cent.For example, the management fee of Xingquan Herun is 1.5%, the custodian fee is 0.25%, and the selling rate of short-term holding is also very high!The management fee of this index fund is only 0.5%, the custodian fee is 0.15%, hold more than half a year, sell without fees.When we move, we save a lot of money.Don’t underestimate the cost.Over 30 years it could cut your profits in half.Remember the above example, a 26.5% vs. 24.2% annualized yield difference more than doubled in 11 years?5. Active fund volatility, small asset allocation volatility even star fund withdrawal, often 20 to 30 percent, ordinary investors simply can not hold.I can’t hold it. It doesn’t matter how much the fund goes up.This is why the fund makes money, base people do not make money.See below.By combining index funds with bonds, gold and commodities, volatility can be kept to a minimum.Most of the time, the pullback is less than 10%.In the New Year’s crash, for example, my portfolio retreated less than 3%.Then I’m in a good state of mind.In favor of my long-term holding.Summary do not look down on index funds, can play through two index funds, Buffett will call your teacher.The reality is that most people don’t work with either index fund and take on all sorts of difficult challenges.Still that saying, investment is to make money, not handsome posture is not handsome.The article also mentioned the advantages of using index and debt base portfolios over active funds.But the premise is that we should constantly cultivate ourselves and master all kinds of investment knowledge.Please think it over a few times.I used to like to learn a lot of techniques, but it turned out to be useless.Now I don’t even have a few individual stocks, and I have to spend a lot of energy to analyze the risks of individual stocks.It’s gonna be a long time if you step on thunder.I don’t even have to worry about that with exponents.Index if the thunder, that your money in the bank is just waste paper.Once you figure this out, what’s there to worry about?Playing sse 50 and GEM can beat the vast majority of fund managers. The logic behind this is the rotation of two styles. If we properly tread these two styles of rotation, we can easily achieve financial freedom with compound interest.There’s value and growth.Before, many netizens asked me what is value and what is growth.I’ll tell you about it later!This is an important topic…Reward voluntary, 1 cent is silent support, ha ha!Like my article friends welcome to my namesake public number: Rui Zhi Rui see!The content above is richer still made classification, see finance and economics together, learn to invest