Risk tips: this paper interprets the content of investor education only for market phenomena and does not constitute any investment proposal and does not provide portfolio investment advisor services. All points in the text represent only the current view of the author, and the information is for information purposes only and does not guarantee its completeness and accuracy. The repurchase, splitting, etc., market phenomena mentioned in the paper are presented as case studies only and do not constitute recommendations for investments for any purpose. There is uncertainty in the market, there is a risk that equity assets, such as equities, will run the risk of loss of principal, and past purchases, historical financial indicators do not represent future gains. All investment decisions are made independently of the investor and with the corresponding investment risk。
Many investors share the experience that the accounts hold several equity funds, which appear to have been diversified, but the net returns are still significant once the backsliding on the track. At the same time, many of the targets are bought under the same industry logic, and the number of products is increasing, and the bottom assets remain in the same direction. Once the industry is down, the market style changes, the hold-up falls simultaneously. It's not really dispersing, it's just putting eggs in the basket that gets together. The number of products has increased, and the risk has not been really spread, but a single risk has been added。
RealAsset allocationThe core is not to buy a few more products, but to select low-relevance assets. The allocation of funds to different risk segments, with low-relative assets expected to have a hedge effect, roughly smoothing the portfolio, and reducing the probability of simultaneous decline in the accounts, is expected to take place when a class of assets is under pressure. If all holdouts are driven by the same macro environment, the same industrial chain, and the same market style, even with more holdouts, they are only repeated exposure to the same risk。
The stock mix is the most classic hedge. The economy is warm, business is profitable, stock markets are strong and bond performance is flat; when markets are expected to be weak and stock markets are under pressure, risk-averse assets, such as public debt, tend to be more easily favoured with funds and are expected to provide some cushion for volatility in the overall portfolio。
In addition to equity debt, the low correlation between assets can come from different dimensions. For example, domestic and overseas assets are affected by different economic cycles, the interest rate environment and exchange rate factors, and moderate fragmentation helps to reduce the impact of single market fluctuations on accounts; assets such as gold are also relatively less relevant to equity markets and may provide a buffer for portfolios where risk preferences are declining, inflation expectations are rising or geographical uncertainties are increasing. However, low relevance does not mean never falling, nor does it mean that losses can be fully offset at any time, so the configuration requires dynamic scrutiny, not buy-out。
The asset allocation need not be complex and the accounts should be split into four sums according to the purpose of the funds。
First: emergency funds are readily available. For daily consumption, temporary expenditure, priority is given to securing liquidity. Imf and cash management can be configured to be readily available to avoid short-term fluctuations。
Second: guaranteed funding to protect against risk. No return on investment is sought, but only to avoid sudden changes in household finances. The insurance scheme needs to be tailored to fit household income, liabilities and health status, and not blindly replicate others ' configurations。
Thirdly, the main source of robust value added is also the ballast of accounts. The core objective is to maintain the principal and to counter inflation, giving priority to sovereign debt, large bills and relatively low volatility of solid harvest products. Such assets are difficult to yield super-high returns, but they can effectively reduce overall portfolio volatility and help investors to stabilize their mindsets and hold positions for long periods of time in shock。
Fourth: access to financial resources. Participation in the equity market is limited to this spare money, provided that even if there is a significant retreat, it does not affect daily life at all. It is only by keeping high-risk positions within the reach of losses that we can wait patiently for repair and truly appreciate the value of decentralized configurations。
Once the asset allocation has been completed, it is not no longer adjusted. Market operations can gradually divert the account structure from the original set-up: the high-risk position ratio may increase passively as equity assets rise; and the portfolio defence capacity decreases when bond assets are underperforming。
Therefore, asset allocation needs to be rebalanced periodically. The accounts can be reviewed quarterly or semi-annually, with a moderate reduction of the larger-growth assets to supplement the underrepresented assets when the proportion of assets in a particular class is higher than the deviation from the target. The aim of the rebalancing was not to predict high and low levels of markets, but to keep the portfolio at the same level of risk。
Many felt that asset allocation would slow down the gains of the cattle market and would not win the hot track. However, the original purpose of the configuration was not to seek to maximize the benefits of cattle-marketing, but to voluntarily forgo some of the very high returns and increase the ability of the combination to withstand the bear-market adjustment。
The greatest risk of investment is often not a fall in markets, but rather an imbalanced warehouse space and a mismatch of duration, which results in being forced to cut off at a lower level. Fake dispersion is simply a pile of products and a high concentration of risk; it is so dispersed that a balance is struck between asset classes, duration of funds and source of risk. The pragmatic path to finance has always been to identify the purpose of each fund and match the corresponding asset; to stabilize portfolio fluctuations before pursuing higher returns. Asset allocation will enable smooth cross-border shocks。
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