When it comes to investing, many people around you know that if you can buy low and sell high, you will be successful. But in reality, it may be because of busy work forget to check the investment situation, or because of the rise when you want to earn more, down when you want to grab the rebound, basically no one can 100% catch the best buying and selling point, and the most common situation is to buy after not in the right time to get out, so many friends have the experience to say that the timing of the investment is a more difficult problem to grasp.
In fact, you can avoid the problem of not knowing what to do when prices fluctuate dramatically by setting a profit and loss point when investing.
Setting a stop-loss point means thinking about how much you can stand to lose on the investment, for example, if you have $100,000 invested and you feel that you can't forgive yourself if you lose $90,000, then your stop-loss point is 10%.
The same goes for the profit point, you can calculate how much money you have made on this investment and you will be satisfied. To be honest, an investment that pays twice as much in one year as a one-year bank deposit would be considered a successful investment. If it's 15% or more, that's a pretty good result. It is a good idea to keep your investments under constant review to avoid exposing yourself to too much risk.
It is a common practice to receive a monthly statement of your investments, which is now offered by banks, brokers and fund companies alike. If you have access to the internet, it is even more convenient. With electronic trading via the internet, you can also set stop-loss and profit points when investing and automatically buy or sell when the conditions set are met. Investors can set their own risk tolerance to help them grasp the timing of their investment through prior settings.
Let's take fund investment as an example. The fund emphasizes long-term investment, so if you make a profit on your investment, should you take a profit or continue to hold it? Is it contradictory to investing for the long term? This is a problem that many investors will face. In fact, investing in finance is a continuous and uninterrupted act, and as market trends change, the process of long-term investment should still be flexible.
The focus of fund investment is on the complete "Asset allocation", with the investment process should be flexible to adjust, so as to effectively improve the chances of winning the investment. Before you choose to invest in a fund, you should have certain expectations of returns and tolerable losses, financial goals, etc. Even if you plan to invest for 10 years, you should set profit and stop loss points according to your investment needs during that period. In this regard, the following two principles can be used as a reference for investors.
1. Determine the investment period of the funds. If the invested funds are to be redeemed after a certain period of time (e.g., Purchase of a house, going abroad, children's education, etc.), it is advisable to keep an eye on the market at least six months in advance to find the best time to redeem.
2. Adjust your expectations of investment returns. Before choosing a fund to invest in, investors will have certain income expectations, the current market has gradually entered the era of small profits, the fund's investment return of 10% to 20% (above) should be a good performance, profitable redemption point can be set according to this initial standard.
