Understand economics from scratch

Chapter 32 Why You Don’t Manage Your Money—Practical Finance You Must Know (4)
Whether investing in stocks, funds or real estate, ordinary people hope to find a method that is both safe and can bring investment returns, because most ordinary people may only invest in one or two properties in their lives, or put their retirement funds or other surplus The money is put in the stock market because I don't have the energy or the professional knowledge to invest. No matter what the investment is, return and safety are the most concerned issues of the people.When you hear that someone has earned 100 million yuan in investment, don’t be jealous, but look at how much he invested. To see the rate of return, you must look at the percentage of income and investment, and also depends on the risk and operation method. How much risk is there? afford it.

Investment is a major event in life, and no one can guarantee that you will not lose money completely, but if you can invest according to the following principles, you will definitely maximize your risk reduction:

(1) When you don't know what to invest in, you must hold the money tightly in your hands and don't invest lightly.If you decide to invest in the stock market, don't invest if you don't know which stock to choose.If you can’t describe a company in one sentence, don’t buy its stock. In one sentence, such as, this company is growing very fast, and this company has great potential, instead of talking about a bunch of this indicator, that indicator, As a result, there was no clear judgment.This method is also suitable for real estate, and which real estate company to buy a house can also be thought of in this way.

(2) Don’t expect too much. Greed is the most taboo in investment. When you expect too much, you will easily dream and cannot wake up. You must know that in many cases, the rate of return on investment can reach 10%. Not bad.How much do you expect your return on investment to increase, and you always want to eat the biggest watermelon, but the result is that you may not even be able to eat sesame seeds.Don’t chase after a certain stock when you see it rising. Remember, there is a difference between a company’s stock and a company. Sometimes, a stock is just an unreal shadow of a company.

(3) Don't underestimate the risk. When buying stocks, don't think about how much you can earn, but think about how much you can lose, and don't believe that companies with debts greater than funds have any magic weapons. Try not to operate ST stocks. The stock transactions of listed companies with abnormal financial conditions or other conditions are subject to special treatment (special treatment). Due to "special treatment", they are prefixed with "ST" before the abbreviation, so this type of stock is called ST stock], because some companies are currently stock Although the market value is good, it may pay dividends to shareholders by issuing stocks or borrowing money, but it will eventually get into trouble one day.

(4) Don't put your eggs in one basket. Unless you are very rich, you can't bet on one or two companies, and don't trust those investment companies that only focus on one industry.

(5) Profit is the only indicator for judging the company's stock trend. No matter what analysts and companies brag about, remember a principle that profit is profit.

Investment itself also plays with numbers, so it is necessary to calculate profits scientifically. You must not be confused by feelings. You must have real data basis. When investing, once you have doubts about an investment, you must immediately abandon it, because in actual operation , intuition is important.Although the above investment methods cannot guarantee that there will be no losses at all, it is the safest to stick to this investment strategy, and even if you lose, you will not lose too much.

Stocks: A must-know means of asset appreciation

A monk has never traded in stocks, and never wants to trade in stocks, but he was forced into the stock market by human beings. He started his career in the stock market with his only incense money, but a monk is a monk after all, and he can’t get it right , when others buy, he does not buy, and when others sell, he does not sell; when the stock market rises, many people rush to buy, but the monk said, Amitabha, money is something outside of the body, let them earn it; When falling, the monk said, "Amitabha, I will not go to hell, whoever goes to hell, the Sajia will save you, sell them all to me."As a result, the monk was never caught, and the stocks he bought rose sharply when the stock market fell, but others regretted cutting their own flesh in advance.In the stock market, so many smart businessmen failed to make money, but the monk made a lot of money so easily.

如果你在1965年投资1万美元巴菲特的股票，35年后的今天你的财富已经积累到5000万美元，正好是美国标准普尔指数同期投资报酬率的100倍。巴菲特在11岁时候，就以38美元开始投资股票，而今天他的财产规模已经积累到了60亿美元。

How does Buffett invest?There are a lot of books about Buffett on the market, what to learn from Buffett, Buffett teaches you to trade stocks, almost Buffett, the hero known as the American stock god, has become a myth in the stock market.Backgammon founder Duan Yongping once bought the right to have lunch with Buffett for US$600 million, and then the famous private equity investor Zhao Danyang also spent US$600 million to have lunch with Buffett. What kind of myth does Buffett make people worship so much? What investment skills he relied on made him victorious in his life's investment, and he was a stock speculator who claimed to never lose money.

The reading materials on the market, when talking about Buffett, only talked about a well-known investment philosophy throughout his life-value investing.The so-called value investment is to select companies with growth potential, buy stocks, and hold them for a long time. Buffett claims that he will never do short-term.Therefore, many Chinese people have learned from Buffett's thinking, buying a stock and holding it for a long time.So some investors bought the shares of Industrial and Commercial Bank of China. No matter how the market fluctuated, he didn’t care. In a word: He wanted to learn from Buffett. He held an investment for several years without seeing any results, and he didn’t sell it when it was high. Don't give up when you're down.

If this investment is done in other businesses, it may have earned more than this figure. Is Buffett's long-term investment values ​​suitable for the Chinese stock market?Some investors have lost confidence in Buffett, because they feel that Buffett's investment philosophy is meaningless to them.If Buffett is only doing long-term holdings, what does it mean that he sold PetroChina in 2008?He also does short-term.He does whatever it takes to make money.A real investor will never tell others the secrets of investment, so Buffett has none of the public investment skills that he told the media. Speaking of long-term holding, it is a concept suitable for large investment companies. He invested in Coca-Cola, but he convened a board meeting at the most difficult time for Coca-Cola to save Coca-Cola from danger.This is something that ordinary small investors can afford to invest in.

Retail investors are still suitable for making short-term money, taking tens of thousands of yuan to hold a company for a long time, it is better to earn enough money in the short-term, and then focus on investing in a company's stock, holding heavy weight.If Buffett really does what he said, only doing long-term business, then why should he worry about his company's temporary losses in 2009.In fact, Buffett has misled many investors. People think that the long-term is reasonable, and they all go for the long-term, but they don’t know a basic common sense of capital, that is, the same amount of capital brings the same amount of profit. When the capital is small, you go Long-term investment, even if it brings you a high profit rate within 10 years, is not as high as the profit you can get from investing a lot of capital in projects with low profit margins.To make an extreme analogy, if you invest 1 yuan in a project, the profit rate is 100%, and if you invest 1000 yuan in a project, the profit rate is only 1%, which project will have more profit? You may get a profit of 1 yuan for a project worth 1 yuan, but you earn 1000 yuan for a project worth 10 yuan. If you want to persist in the first project for 10 years, and the second project will take 1 year, then your first The investment in the first project is 10 yuan in 1 years, but the investment in the second project is 10 yuan in 100 years. The profit obtained is 100 times that of the first project. What if we use 1000 yuan for long-term holding? ? After 10 years, we have obtained a profit of 1000 yuan, which is far greater than the 10-year investment income of the second project.This shows that if you have less funds, it is not suitable for long-term holdings, and you should fight short-term. How can you make more money with a small amount of funds?It is chasing short-term high profits, using 1 yuan to chase short-term windfall profits that can be high-risk, constantly repeating operations, and constantly switching stock types. For example, if you invest 1 yuan in Kweichow Moutai today, it has pulled two daily limits in a row After that, you made 2 cents, and then withdrew again, looking for profit-making stocks. If not, even if you made 1 cents, you have to jump in and out to avoid asset losses.Many stockholders want to know how to find such stocks. When Buffett operated PetroChina, there is a scene worth learning. You don’t need to read the report analysis, you only need to look at the actual situation of the company, so Buffett went to cheer This is the place that most directly reflects the true value of a company, and then look at the price-earnings ratio. You don’t have to believe in the profits in the financial statements. You have to believe in the profits you judge. The price-earnings ratio is the comparison between the expected profit and the current company’s market value. If you expect this The ratio of expected profit to market value within one year is already greater than 15, so it is not suitable for reinvestment, but the calculation of this profit must be estimated by yourself in order to find a suitable black horse.

Funds: Let the experts manage your wealth
The funds we are talking about now usually refer to securities investment funds.Securities investment fund refers to a kind of interest-sharing and risk-sharing in which securities investment is carried out in the form of investment portfolio by pooling the funds of many investors through the sale of fund shares to form independent assets. The collective investment method of undertaking.Securities investment funds are called mutual funds in the United States, unit trusts in the United Kingdom and Hong Kong, and securities investment trusts in Japan and Taiwan.

In order to further deepen the understanding of the concept of funds, we can make a metaphor: Suppose you have a sum of money and want to invest in bonds, stocks, etc. Several other people invest in partnership, hire an investment expert, and operate the assets jointly invested by everyone to increase the value of investment.It would be very troublesome if every investor had to negotiate with investment experts at any time, so one of the most knowledgeable ones was recommended to take the lead in this matter.Periodically, a certain proportion of the assets jointly invested by the partners will be given to him, and he will pay the master's labor fee on his behalf. Of course, he will take the lead in doing all the big and small things, including running errands from house to house, and remind the master of the risks at any time. At the same time, regularly announce the investment profit and loss to everyone, etc. Don't be too busy, the money in the commission also includes his labor fees.This method of operation is called partnership investment.When this partnership investment model is magnified 1000 times or 1 times, it will become a fund.

If this kind of partnership investment activity is approved by the national securities industry management department (China Securities Regulatory Commission), and the lead operator of this activity is allowed to publicly raise funds from the public to attract investors to join the partnership investment, this is the issuance of public offering funds, that is, Funds that are common to everyone now.

The fund management company is the lead operator of this kind of partnership investment, but it is a corporate legal person, and its qualification must be approved by the China Securities Regulatory Commission.The fund company, like other fund investors, is also one of the partnership investors, but because it takes the lead in the operation, it needs to extract labor service fees (called fund management fees) every year from the assets of the partnership in a certain proportion, and hire and manage them on behalf of investors. The investment masters (that is, the fund managers) who are in charge of trading, and those who help the masters collect information and conduct research, regularly announce the assets and income of the fund.Of course, these activities of fund companies must be approved by the China Securities Regulatory Commission.

In order to ensure the safety of the assets invested by everyone in partnership and not be misappropriated by the fund company, the China Securities Regulatory Commission stipulates that the assets of the fund cannot be placed in the hands of the fund company. It is necessary to find a person who is good at this matter and has a high reputation to take charge of it. Of course, this role is none other than the bank.Therefore, these contributions (that is, fund assets) are placed in the bank, and a special account is established, which is managed and kept by the bank, which is called fund custody.Of course, the bank's labor service fee (called fund custody fee) also has to be paid annually on a proportional basis from the assets of the partnership.Therefore, relatively speaking, the fund assets only have the risk of being lost due to poor operations by those masters, and there is basically no risk of being stolen.From a legal point of view, even if the fund management company goes bankrupt or even if the custodian bank has an accident, the people who collect debts from them will not have the right to touch the assets of the fund account, so the safety of the fund assets is very guaranteed.

Investing in funds is to let financial experts manage your wealth for you. It is more worry-free and stable in income. It is very suitable for office workers and people who know little about financial information.However, the fund is a long-term investment product, and it will show good results only when it is held for a long time.

In terms of fund investment philosophy, Americans are more advocating the investment philosophy of Warren Buffett: "Buy stocks that are undervalued by the market and hold them for a long time to make a profit." Data shows that since the bull market in the 20s, US fund holders have The average holding period is 80 to 3 years, which reflects that US fund holders regard funds as a financial management tool rather than a short-term speculation tool, and they usually do not frequently enter and exit with short-term market fluctuations.As Buffett said: "When we invest, we must regard ourselves as business analysts, not market analysts or economic analysts."

Americans are keen on fund investment, mainly because Americans have traditional investment awareness, as well as strong risk awareness and risk tolerance; the aging of the baby boom generation after the Second World War, the beginning of The reform of the national pension system has also prompted Americans to invest in funds.The survey shows that 20% of American fund investors buy funds for the financial goal of retirement and pension, and the proportion of pension assets in mutual funds has also increased from 70% in the early 92s to about 20% at present.

In addition, in the United States, various investment funds are relatively developed. According to reports, there are more than 15300 investment companies, more than 8000 mutual funds, more than 6400 unit investment trusts, more than 620 closed-end funds, and more than 150 exchange funds in the United States.In this way, people have more choices for investment funds.

In layman's terms, an investment fund is an investment tool that brings together the funds of many scattered investors, entrusts investment experts (such as fund managers), and the investment management experts conduct investment management in a unified manner according to their investment strategies, and make profits for many investors. .Investment funds gather public funds to share investment profits and risks. It is a collective investment method that shares benefits and risks.

Gold: a good choice for value preservation and appreciation
Following the "shareholders" and "basic people", "golden people" have become a new family of investors.Especially in January 2008, the stock market continued to fall, while the price of gold was soaring, so many investors withdrew their funds from the stock market and turned to the gold market to seek gold.Gold investment is the most potential investment variety, which opens the door to new wealth for people.So, what is the charm of gold?
As a currency, gold has many functions such as no deterioration, easy circulation, value preservation, investment, and value storage.Of course, with changes in international affairs, the price of gold will also change, but at any time, even if all the paper money cannot be spent, gold can still serve as currency.Therefore, gold has become a new investment product for people. Especially in an uncertain economic and political environment, gold, as a "currency without borders", is favored by people and has become a permanent and timely investment method.At the same time, as a worldwide investment tool, gold has the advantages of being able to obtain quotations around the world, strong anti-inflation ability, much lower tax rate than stocks, fair and equitable gold price trend, easy transfer of property rights, and easy pawning, etc. .This established the status of this natural currency king.

For people, if they want to invest in gold, they need to understand the varieties of gold investment.In my country, there are three main types of gold investment at this stage.

1. Physical gold

Physical gold trading includes transactions such as gold bars, gold coins and gold jewelry, and holding gold as an investment.The real rate of return of this investment is basically the same as other methods, but the amount involved is generally higher (because the invested funds will not exert a leverage effect), and it can only be profitable when the price of gold rises.Generally, the difference between buying and selling prices of jewelry gold is large, which is not suitable for investment. Gold bars and gold coins are the best choice for physical gold investment because they do not involve other costs.It should be noted that holding gold does not generate interest income.

There are two types of gold coins, pure gold coins and commemorative gold coins.The value of pure gold coins is basically the same as the gold content, and the price basically fluctuates with the international gold price. It has the functions of beauty, appreciation, circulation and realization, and value preservation.Commemorative gold coins are more commemorative, and it is difficult for ordinary investors to identify their value. Therefore, the quality requirements of investors are higher, mainly to meet the collection of coin collectors, and the investment value-added function is not great.

(End of this chapter)