Since the beginning of the year, successive big falls have blinded many basic people. Whether you buy a new energy base, a military base, or a liquor base, you have encountered indiscriminate attacks, although there has been a recent recovery, I believe that everyone still has a lingering feeling: fund investment is really difficult.
Moreover, buying a fund is more like a judgment question than a solution problem, the process is right, but the final answer is wrong and can not get a little step point, "judgment" is really too important.
The recent market has always been teaching people, so should we be "afraid" or "greedy" when we encounter a big fall? When can I "bottom up"? Is there a way to judge the timing? Next, Xiaobian takes you to make a squeeze.
#第一步
Judge whether this fund can "bottom out"
Old investors and basic people should know that in the frightening 2015 bear market, many people were not killed by a wave of big falls, but were consumed by continuous replenishment. The situation that the bottom is most afraid of encountering is to fall all the way down, and there is no expected rebound, so that the deeper the set, the more the capital is set.
So, we come up with real money to make up the fund, and it has to be worth it. How to analyze whether the fund can read the bottom? Index funds and actively managed funds have to be viewed separately.
01
Index funds
For the CSI 300, A50, ChiNext index such as the broad-based index fund, as well as new energy, military, food and beverage and other industries or theme index funds with long-term growth prospects, their compilation is basically selected among the mainland listed companies with high market value, active trading, representative companies, if there is a serious deterioration of the company, it will also be replaced from the index on a regular basis, so the index can reflect the country's economic situation and the development trend of the industry to a certain extent.
Although under the market-oriented trading behavior, the index will also have a sharp correction in the short term, but there will basically be no situation in which the stock price will not turn back to the south after the thunderstorm of individual stocks. The mainland economy continues to develop well, and there are often better rebound opportunities in the index in the medium and long term. So we often say that the investment index is the investment of the national fortune. For this type of index fund, the risk of bottoming out in the process of decline is much lower than that of individual stocks.
02
Actively manage funds
Unlike index funds, choosing an actively managed fund is choosing a fund manager, and if it is covered, we need to test the investment level of the fund manager to see if the fund is still worth sticking to.
If you hold the fund for a short period of time and the short-term performance of the fund is not good, you don't need to worry too much. There are too many short-term perturbations, and market style, sentiment and even luck can affect the performance of the net worth. If you have held the fund for a long time but are still in a state of loss, you can first judge whether the reason for the decline is a market factor or a problem with the fund itself.
We need to separate the performance of the market from the level of active investment by fund managers. References can be made to the fund's alpha coefficient (α) and beta coefficient (β), as detailed in "What are the alpha and beta of the fund's investments?" Can you choose a good fund by relying on the alpha coefficient? 》
For ease of understanding, the industry usually uses the following formula for the fund's yield to distinguish between market factors and human factors: yield = alpha coefficient + beta coefficient * market/benchmark average yield.
Beta income is the passive income obtained by the fund following the general trend, while the alpha coefficient is the active income brought by the fund manager through stock selection, timing, etc., reflecting the active investment ability of the fund manager. Therefore, the larger the alpha coefficient, the stronger the fund manager's ability to select stocks.
The alpha coefficient is on the official website of the fund evaluation agency - Morningstar China, and you can query the fund code by entering it. For example, in the following figure, the alpha coefficient relative to the benchmark is 37.24%.
(Source: Morningstar China official website)
If the fund you hold, as in the chart above, can achieve a positive alpha coefficient relative to the benchmark index and the average of the same kind, then the current decline is mainly caused by market factors, and this factor is expected to be gradually repaired in the future, so there is no need to worry too much. However, if the fund is difficult to achieve positive excess returns for a long time, then it may be necessary to consider whether to adjust the position to convert the fund.
#第二步
Establish appropriate psychological expectations
There is an old saying in investment: the novice dies from chasing high, and the veteran dies from the bottom. It is not new to copy the bottom halfway up the mountain and then experience an avalanche. Bottom reading must find a reasonable time, and it needs to have reverse thinking and reasonable expectations.
First, the bottom is not a point, but an interval.
It is unrealistic to try to copy at the bottom and rub it up after buying it. There is too much noise in the short term in the market, and it is difficult to see clearly. Financial academia has proposed many models to simulate the movement of stock prices, such as geometric Brownian motion (GBM) and random walk models, but they all contain random variables. What is a random variable, that is, the unpredictable part. Short-term stock price changes are the result of too many factors, such as policy, news, investor sentiment and market games, an analysis is as fierce as a tiger, the opening suddenly comes to a black swan, and all analysis is invalidated. Therefore, no one can accurately predict the trend of the short-term market, but after analysis (see below), it can be roughly judged that the current time will be a relatively correct time to buy.
Second, avoid a stud.
This method is very common in stock speculation, which is a typical negative case. Some friends in the trap after the position is often the first to buy the most, due to the limited funds can not continue to keep up, the cost has not been effectively reduced, even if the back began to rebound, but the bullet early shot out, can not return the cost.
Moreover, if you stud in a downtrend, you will instead increase the position and face more losses. The appropriate approach is to buy in batches, step by step, after judging the timing. You can first divide the position funds into several equal parts, and then preset a decline range, such as 5%, and add a position for every 5% of the net value of the fund.
#第三步
Look for the right opportunity to bottom out
Undervaluation phase
The so-called valuation is to determine whether an investment product is expensive or cheap, and there are many ways. One of the most widely accepted methods is through an indicator called the "price-to-earnings ratio," also known as PE, which means that the lower the meaning, the cheaper it is, and the higher the meaning, the more expensive it is.
When buying things, we all know to buy cost-effective, price-conscious goods, especially to seize the opportunity of discount promotions. For example, a box of paper draws in the supermarket usually sells for 10 yuan, and the "double eleven" activity to buy two get one free, and people who often buy this paper may want to sell immediately and hoard more. The same is true for investment, and it is important to buy cheaply. The widely respected value investment concept attaches great importance to the "margin of safety", the core is to buy those companies that are undervalued by the market in stages, so the stock price is lower than their intrinsic value, and obtain "value return" through long-term holding. Apply this idea to fund practice, that is, to grasp the investment opportunities undervalued in the market or undervalued sectors.
So how do we tell if it's expensive or cheap by the specific value of PE? The usual method used is the PE percentile method. It is to put the PE value of the moment in history, and you can use the PE value of the past decade (or since the establishment of the index) to see how PE is ranked from largest to smallest in history at this moment. If the ranking is at the end of 20% (the percentile is 20% and below), it means that it is now "cheaper"; if the ranking is higher than the historical data of 80% (the percentile is 80% and above), it means that it is already "expensive" at the moment, which is a more intuitive and reasonable method.
For example, in the past 10 years, the median of pe-TTM in the Shanghai Composite Index is 13.54 times, corresponding to the gray dotted line in the chart below; the maximum 20% range of pe percentile is 15.74 times, corresponding to the red dotted line, above which can be considered "expensive"; the lowest 20% range is 11.12 times, corresponding to the green dotted line, which is considered "cheap" below. From the chart, buying when it is cheap often has a big gain, and buying near the median is also good.
(Source: Wind, 2022-1-17)
In addition, Xiaobian has also demonstrated to you through backtesting that in the practice of fund fixed investment, compared with the fixed investment method of each fixed amount, the strategy of underestimating and overvaluing according to pecenter can indeed help us effectively improve the yield.
Where do PE percentiles look? You can simply refer to the "index traffic light" of a treasure, or you can use the Sky X Fund APP - homepage "Index Treasure" - undervalued list to query.
Maximum drawdown period
Maximum drawdown refers to the maximum value of the yield drawdown when the price moves backwards at any historical point in the selected period and reaches the lowest point. That is, assuming that investors are unfortunate enough to buy the highest point in the range, how much will the biggest loss be. You can refer to the largest drawdown in the history of the fund to comprehensively determine the timing of the bottom.
We can first check what is the historical maximum drawdown of the target fund in the last 3 years or the last 5 years. For example, the largest drawdown in the history of a fund in the past 5 years is 24.96%. If the current fund has fallen by 20% from the previous high, it is quite close to the largest retracement in history, and in theory, there is not much room for further sharp declines, and you can consider reading the bottom in batches.
(Source: Daily Fund.) Risk Warning: The above values are only examples and do not constitute investment advice, and the historical performance of the fund does not predict future performance)
However, the useful premise of referencing the maximum drawdown is that the fund's asset allocation and position direction have not changed much compared to the past, and are more suitable for index funds or actively managed funds with stable style and no drift.
03
A time of market lurch
We all know that successful investing often requires a certain amount of reverse thinking, "fear when others are greedy, greed when others are afraid". However, this is the typical easy to know and difficult to do, "chasing up and killing down" is human nature. History is always cyclical, and each round of the market is always produced in despair, rises in hesitation, and then recedes in madness.
For example, when many basic people make short-term market judgments, they mainly rely on the trend of the market in the past period of time: when the market rises, fund subscriptions are in a tidal wave; conversely, when the market performance is not good, most people's interest in fund subscription will drop to a low point.
For example, at the four circles in the figure above, the share of equity new base issuance is as low as 0.00 billion, 5.029 billion, 10.602 billion and 12.399 billion respectively. When the market falls to a low, investors tend to panic and stop at the low. However, after the market consolidates and digests the risk, it will begin to rebound gradually, and the cold stage of the new base issuance may also mean a good time to enter the "bottom".
Taking (1) October 2012, (2) January 2014, (3) September 2015, (4) August 2018, these new base issuance troughs as an example, at this time, if you buy a wide-base index and an equity fund index, you can hold it for one year or three years with a high probability of obtaining a very good performance return.
(Note: The data comes from Wind, which counts the gains of 2012.10.31, 2014.1.31, 2015.9.30, 2018.8.31, respectively; units) of buying different indexes to hold for 1 and 3 years. Historical performance of an index is not indicative of future performance and is not indicative of investment advice. ）
Therefore, when we see "fund issuance entering the cold winter" in the news, we are reminded that the market may have entered a difficult and anxious period, and perhaps we can consider starting to "bottom out" the layout.
Xiaobian has told you in yesterday's tweet that investor returns = fund returns + investors choose time to profit and loss, and the positive returns created by timing are far less than the drag caused by timing. Looking for the bottom range "bottom reading" can also be counted as a kind of "timing" with an increased relative winning rate.
For most investors, if you are not sure about "timing", you may wish to remember two principles: one is long-term holding, and the other is to insist on fixed investment.
The direction of the market is unpredictable, and the short-term noise is the most, but in the long run, the longer the holding period, the more likely it is to reap the final gift of time. According to the "White Paper on the Study of Investor Behavior Finance in China's Equity Funds", the longer the equity fund is held, the higher the proportion of positive returns, and when held for three years, the probability of positive returns exceeds 80%.
The income of fund investment mainly comes from the continuous creation of value and the growth of economic profits by enterprises, excellent public fund products have the ability to continuously create new highs in the long-term investment process, but there will inevitably be shocks and declines in the investment process, this waiting process may be long, investment is more similar to a practice, and it is not realistic to expect to get rich overnight.
Since the short-term trend cannot be predicted, no one knows when the next wave of the market will come, it is better to choose long-term optimistic products, calmly set investment, and always remain present through timing and quota investment, and do not miss every market.
Risk Warning
The views of this material are for informational purposes only and are not intended as any legal documents, and all information in the materials or opinions expressed do not constitute the final operational advice of investment, law, accounting or taxation, and the company does not make any guarantee for the final operational advice with respect to the contents of the materials. In no event shall the Company be liable to any person for any loss arising from the use of any content in this material. The above does not constitute a recommendation for individual stocks. The past performance of the Fund and the level of its net worth are not indicative of its future performance, and the performance of other funds managed by the Fund Manager does not constitute a guarantee of the performance of the Fund. The Manager does not guarantee profitability and does not guarantee a minimum return. Investors should fully understand the difference between the fund's regular fixed investment and zero deposit and withdrawal and other saving methods. Regular fixed investment is a simple and easy way to guide investors to make long-term investments and average investment costs. However, regular fixed investment does not avoid the risks inherent in fund investment, does not guarantee that investors will receive returns, and is not an equivalent financial management method that replaces savings. The market is risky and caution should be exercised when entering the market.