Stock Fund: A High Risk, High Yield 'Wealth Engine'
Stock funds invest the majority of their funds (usually no less than 80%) in the stock market, constructing investment portfolios by investing in stocks from different industries and market values. In a bull market, stock funds have achieved astonishing returns, such as in the structural bull market of 2019-2021, where some high-quality stock funds had three-year returns exceeding 200%. But in bear markets, the net asset value of funds will also significantly retreat, for example, in 2018, the overall stock market fell, and many stock funds experienced an annual decline of over 20%. The returns of stock funds depend on the fund manager's stock selection ability and market conditions. Excellent fund managers can obtain excess returns by exploring potential stocks through in-depth research. Investing in stock funds is suitable for investors with high risk tolerance and long investment periods, and it is best to adopt a strategy of buying in batches and holding for the long term to smooth out the impact of market fluctuations. At the same time, investors should pay attention to indicators such as fund size, position concentration, turnover rate, etc., and choose high-quality products.
