Inflation, asset shrinkage, wealth freedom, investment and financial management, and a series of words fill today's life. It is inevitable that the gap between the rich and the poor in society is getting wider and wider, the class transition is becoming more and more difficult, and the stock market investment market is getting worse and worse. A wave of sharp falls years ago and years later, people can't help but sigh, this is not entering a bear market.
Buffett once famously said that when others are afraid, I am greedy; when others are greedy, I am afraid.
This sentence, enshrined as the truth, also tells the mystery of stock market investment. However, facts are often overlooked.
Most of us are afraid when we are afraid and greedy when we are greedy.
Think about it, have you ever seen the stock rise wildly after the profit was closed, and slapped your thigh with chagrin; have you ever hesitated when you fell, and as a result, you chattered, the assets shrank rapidly, and endured the pain of cutting meat?
I think everyone who invests in the stock market has had this experience and feeling.
Recently read a book about fund investing, which was written by the famous American investor Thomas. Howard, Jason. A. Watson co-compiled "The Truth About Fund Investment".
Compared with the passive funds that Buffett has always admired, these two investors are keen on active funds.
So what is the difference between active funds and passive funds?
In layman's terms, active funds rely on the technical and fundamental analysis of fund managers to select stocks and select time, so as to actively obtain excess returns in the market.
Passive funds, also commonly known as index funds, do not rely on the level of the fund manager's trading, but select specific indexes as objects for tracking, and copy the index, not actively seeking to surpass market returns.
In short, active funds are selected by the fund manager to decide what to buy and how much to sell.
Passive funds copy indices for specific objects and only need to decide what to buy.
In this way, this book is not particularly suitable for investment xiaobai to read, but is suitable for securities analysts, fund managers, private wealth consultants, financial consultants and so on who have rich experience and clear investment goals and are eager for excess returns.
Is it not necessary to read this book because of investment? I don't think so, it can be used as advanced books and supplementary books to open up our financial thinking. The book focuses on showing us how to use behavioral bias to invest.
It describes the use of big data to explain behavioral visions that are significant and can lead to excess returns; it also teaches us how to use the perspective of behavioral finance to find flaws in financial statements; and how to set the right criteria for judging and how to identify active investment managers who continue to be successful.
I am personally practicing passive funds, because I am not a financial professional and have not engaged in financial investment and other related work, so I believe that professional things should be handed over to professional people to do.
Buffett has bet with others that real money validates the return on investment of active and passive funds. It turned out that the active funds he operated outperformed the passive funds.
Of course, this case does not mean that passive funds are necessarily better than active funds. The return on investment involves a wide range of influencing factors, not only considering the domestic and foreign financial environment, localized financial regulatory policies, economic development and trends at that time, human impact, phased returns and other factors.
What is the better or worse of active funds vs passive funds? I think it's the same as Kung Pao Chicken vs Braised Beef, everyone has their own feelings and preferences.
Of course, preferences arise from practice, and choices are based on rational analysis. What right do people who haven't eaten these two dishes have to judge? Or maybe there will be a third choice in life.
Back to the point, is it necessary to read the book "The Truth About Fund Investment: How to Use Behavioral Finance to Gain Insight into Irrational Decision-Making", and who is suitable for reading it?
I still have that sentence, and it is more appropriate for the little white of fund investment to read "Easy to Learn Fund Investment: A Practical Guide to Funds for Ordinary Investors".
The book "The Truth About Fund Investment: How to Use Behavioral Finance to Gain Insight into Irrational Decision-Making" is equivalent to an additional problem in school, and people with ability and pursuit do it well.
Wealth management is for happiness, and at all times, remember to invest extra money instead of saving lives or surviving money to fight a battle.
I am Qingyan, pay attention to me, accompany you to read and see the world.