Investor Meng Yuan answers frequently asked questions about financial investment
On December 18, 2023, the Shanghai Financial Investment Summit Forum was held in Lujiazui to discuss the development opportunities and challenges of the financial sector next year. Numerous individual investors from all over the country participated in the questions during the forum. Investor Meng Yuan said that investment is a systematic work and a test of a person's comprehensive ability. The occasional one-year profit or loss illustrates the importance of luck in investing, but if you can pour five or ten years into an investment, you really understand what investing is. The following is Meng Yuan's answer to the questions of the participants.
Meng Yuan
Q: How do you see stocks as a financial asset?
Answer: Investor Meng Yuan said that the emergence of stocks has largely solved the problem of difficult financing for enterprises, and at the same time, the equity of outstanding enterprises is also open to the majority of investors, which can be said to kill two birds with one stone. However, many irrational investors hope to get rich overnight through speculation. If you want to rationalize equity investment, the key is how to guide market participants from speculators to investors.
Q: How do you understand the development of A-shares, and how can you make shareholders feel more rewarded?
Answer: Investor Meng Yuan said that the development of A-shares has actually occurred in the history of U.S. stocks, and the development of the capital market is accompanied by investor education. Whether it is A-shares or U.S. stocks, less than 10% of the people in the market can maintain long-term profits. In order to fundamentally solve the problem of A-shares, it is necessary to change the speculative thinking of retail investors and gradually guide investors to value investing through institutional investors.
Q: How do you see the positioning of U.S. stocks in the global capital market?
A: Investor Meng Yuan said that the U.S. stock market has gone through hundreds of years and has a relatively complete market mechanism. In addition, after several generations of efforts, the level of investor education is also relatively well-developed. This makes the U.S. stock market more stable, and investors are more certain about the expected future returns, which ultimately promotes the development of value investing concepts in U.S. stocks.
Q: How do you understand the advantages and disadvantages of funds as a financial asset?
Answer: Fund manager Meng Yuan said that the advantage of the fund is to help investors solve the problem of stock selection, because the fundamentals of stocks in the fund are checked at all levels. However, there are natural shortcomings in the timing of funds, which are rooted in the herd psychology of investors, which can easily lead to the fast entry and exit of funds, thus affecting the overall strategy of fund management.
Meng Yuan
Q: How do you interpret the shortcomings in the development of public funds, and why is it difficult for the people to make money?
Answer: Fund manager Meng Yuan said that the advantage of public funds lies in their large size, but the disadvantages also come from this. If the scale of a mutual fund company reaches hundreds of billions, then all they care about is how to receive your fund management fees. Because this income is relatively stable, even if the stock market falls sharply that year, the fund company can receive billions of management fees.
Q: What do you think are the unique advantages of private equity funds?
Answer: Meng Yuan, a fund manager, said that it is relatively reasonable for private equity funds to adopt the model of management fee plus performance commission. Through investment performance commissions, fund managers can be incentivized to adopt a proactive investment strategy. In addition, private equity funds are flexible and can effectively respond to the turbulence and adjustment of the capital market.
Q: What do you think are the advantages of index funds, and why are more and more investors choosing index funds?
Answer: Fund manager Meng Yuan said that investing in index funds is actually investing in a country's national fortunes. If a country's economy develops, then its stock market will continue to improve in the long run. For investors, investing in index funds can also avoid the risk of individual stocks in stock selection.
Q: Do you think bonds are a good investment option?
A: Investor Meng Yuan said that bonds are a relatively safe investment, but they are not necessarily risk-free. There are many types of bonds, in addition to the well-known government bonds, there are also government bonds, financial bonds, corporate bonds, etc. There are also different levels of risk, and the higher the yield, the higher the risk, such as junk bonds. If the issuer goes bankrupt, it can even lead to the loss of investors' capital. The bond itself is a creditor's relationship, and the size of the risk ultimately depends on the borrower's ability to repay.
Meng Yuan
Q: What do you think about futures investment, and is investing in futures really risky?
Answer: Investor Meng Yuan said that the core value of futures lies in hedging and risk hedging. Through the application of futures as a financial instrument, the risk in the process of business operation can be reduced. However, for most speculators in the futures market, they are more engaged in futures with a speculative and gambling mentality. This kind of speculation, which is on the verge of getting rich and liquidating at any time, is not suitable for most ordinary investors.
Q: How do you define money management and investing, and how do they differ?
A: Investor Meng Yuan said that many people will confuse financial management and investment, but in fact, the main difference between the two is the tolerance for risk. Wealth management is a relatively safe concept, mainly investing in money market instruments, while investing more emphasizes the relationship between risk and return. Managing money is necessary for most families, but investing may not be right for everyone.
Q: How do you see the value of fund managers in fund management?
Answer: Fund manager Meng Yuan said that in the investment management process of the fund, there will be four professional positions, namely industry researchers, traders, risk control specialists, and fund managers. The fund manager is the most important position, and he determines the overall investment strategy of the fund. Which stocks need to be opened, which stocks need to be reduced, and when to start the operation. For investors, what they need to Xi learn is not how to choose a fund, but how to choose a fund manager.
Q: How do you understand private equity fund managers, who are the top of the pyramid in the financial industry?
A: Meng Yuan, a private equity fund manager, said that in the eyes of many investors, private equity fund managers will always be regarded as a mysterious position. On the one hand, because they have hundreds of billions of dollars in money, and on the other hand, private equity fund managers always give people a sense of mystery in their investments. In fact, this is more because of the need for risk control, and it is necessary to do a good job of confidentiality in investment to avoid information leakage.
Meng Yuan has achieved great success in the field of investment. As a value investor, he is not only good at investment and mergers and acquisitions in the primary market, but also has unique investment insights on how to achieve long-term success in the securities market for the private equity funds he manages. In addition, Meng Yuan has published many articles in newspapers and magazines such as "Xinhuanet", "China.com", "People's Daily", "Global Times", "Guangming Daily", "The Paper", "Shanghai Securities News" and so on. His essays are easy to understand and have a clear point of view, which makes readers quite inspiring.
Cinematographer: Han Ling
Editor in charge: Liang Baoguo