People sit in their homes, pots come from heaven.
There's an investment risk called, you're not doing anything, but your wealth is evaporating, and that's our inflation.
How can ordinary people fend off inflation and make your money more valuable? This issue will take you to grasp the mystery of index funds.
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There is a passage on the Internet that summarizes it very accurately:
The main contradiction at present is the contradiction between the depreciation of the masses of the people when they take cash and the loss as soon as they throw it out.
You may remember the price when your parents bought the house 10 years ago, and today you can only buy one car for the same price! This is inflation, and our money is depreciating every day.
It seems that every year the income is increasing, the money in the pocket is getting more, but the purchasing power is decreasing compared to the past.
For example, last year's 100-dollar item now costs $104 to buy. If you didn't get 4 yuan of interest income of 100 yuan last year, then you are a proper loss.
You won't manage your money, and sooner or later your money will be earned in vain. Putting money in the bank is actually choosing the most negative investment method.
50,000 yuan deposited in the bank, ten years later, can only afford to buy 30,000 yuan of goods that year, because the price is rising, if you put the money on the bed head does not use, just a greater loss.
Once a million yuan household in the 80s, that year can buy a building of money. I can only buy two phones today. Inflation forced us to make one of the worst investments.
So how can ordinary people resist inflation? Buy a house, the principal required is too high, there are no hundreds of thousands of can not take down;
Buy stocks, the risk is too big, a little inattentive will lose money.
So what else can I buy? The answer is index funds. Buffett, the world's top investment guru, said: If I hang up one day, let my family buy all the money into an index fund.
You said that the gods of the tang dynasty did not teach their stock trading secrets to their families, but let them buy index funds. You can guess that there must be a mystery of making money here.
What is an Index Fund? In layman's terms, index funds are actually selecting a basket of stock portfolios according to certain rules.
For example, the CSI 300 Index Fund is a fund that selects the first 300 stocks from thousands of stocks and forms a fund.
In other words, if you buy this fund, you buy 300 stocks.
So buy index funds, in the end, do you make money? In the folk popular saying, buying index funds is buying national fortune.
If a country's economic level is healthy and upward, then the long-term investment of the index must be profitable.
For example, the CSI 300 Index, behind these stocks are the top 300 large companies listed in China. As long as the country's political stability and economic development, then this CSI 300 index will always exist.
Of course, it is possible that some companies will lag behind in the rankings because of poor management, but there will still be stronger companies to replace them. It is precisely because the stock index foundation excludes old companies and absorbs new companies, so this index fund has existed for a long time to achieve immortality.
We know it from the historical trend of the CSI 300 index.
The CSI 300 index rose from 1,000 points in 2005 to 5,930 points in 2021, an increase of 4.93 times.
As another example, the most well-known index in the United States is the Dow Jones Index, which was born more than a hundred years ago. Initially starting from 100 points. As a result, more than 100 years later, the Dow Jones index has slowly risen from 100 points to nearly 20,000 points today.
Theoretically, the lifespan of the index is equivalent to the lifespan of a country. To buy an index is to buy national luck. As long as the country moves forward, you can make money.
If the timeline is long enough, plus dividends and some investment skills, through the index fund to do financial management, the annualized return can indeed be 8%-15%.
Resisting inflation is completely fine.
And index funds also have the advantage that they are inexpensive.
The purchase of funds generally requires subscription fees, management fees, redemption fees and so on.
Because index funds passively track stock indices, fund managers do not need to spend a lot of time and effort to choose the type of stock and the timing of buying and selling. This reduces the management costs of the Fund to a certain extent.
Instead of spending hundreds of thousands of dollars to buy 300 stocks at a time, I am more willing to spend 100 yuan to buy the CSI 300 index fund. That's not only worry-free but also cheaper.
Although the CSI 300 Index has a long-term upward trend, it has large fluctuations in the short and medium term and fluctuates. If you buy it all at once, it's easy to get caught. Even buy at a high point, it takes several years to get back the cost.
So if you don't want to buy at a high level, how to invest in index funds? Then you need to use the technique of fixed casting.
If you want to learn the fund to invest in friends, play a number 1 in the comment area.
To summarize:
Today we talked about inflation eating up your wealth every year;
It also shared that it is possible to outperform inflation and obtain a considerable return by investing in index funds.
Buying the index is to buy the national fortune, the index of immortality, good quality and low price, naturally suitable as an ordinary person's financial artifact.
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The next issue will take you to learn the selection of index funds and master the secrets of buying low and selling high. Pay attention to Qin Ming Financial Management said that it is easier to make money in financial management.
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