Investment has a thousand ways, but risk is the first.

Have you been playing with funds for so long, do you really understand funds? Think seriously, is it planned and organized? Or is it blindly following and emotional?

In this article, let's talk about this topic.

Do you really understand funds?

If you are a person who is playing with funds or has been playing with funds for a long time, have you made money through funds? Or is the fund an additional expense for you?

In fact, to say a sentence that most people don't want to hear, it is very true and heart-wrenching, in fact, you don't understand funds at all.

Why do you say that?

How did many people buy the first fund or the first fund?

It may be accidentally brushed on a certain host, video recommendation, or because friends and relatives around are playing, and then follow the wind to buy, or it may be a hot head and buy a fund.

In short, there are many reasons to buy the first fund, countless, but in the final analysis, it is a sentence: I did not make full preparations when buying the fund, and even did not understand what a fund is.It is precisely the blind following of trends and belief in self-media recommendations that not only failed to bring additional income to the fund, but also resulted in a significant financial loss. It's really a case of being too sad to cry, and the dream of getting rich has also shattered.

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These problems all point to the issue of "not understanding funds." It is precisely because of the lack of understanding of funds that losses occur, and that's why funds have become the largest additional expenditure.

In investment activities, most people do not have their own trading strategies and methods, and more are based on hearsay or blind following.

As a result, it has also led to the fund affecting the changes in one's emotions.

So, how can one be considered as understanding it?

01. Possessing all the basic knowledge of funds

People can never earn wealth beyond their cognitive range, especially in investment. Therefore, to truly understand funds, one must first have a wealth of basic knowledge.

For example: What is a fund? The classification of funds? The investment style and strategy of funds? The risks of funds? And so on.

Only after possessing the basic knowledge can one be qualified to move on to the next step.Basic common sense is like the foundation of a house; if even the foundation is not solid, it will be difficult to build a sturdy and durable house, and the same principle applies to funds.

Therefore, the first step is to have a solid grasp of basic common sense, which can be achieved through learning.

02. Use a small amount of capital to test and learn from mistakes

After acquiring basic common sense, we can start by investing a small portion of our capital in the market. This process involves continuous trial and error and summarization.

After all, there is a gap between theoretical knowledge and practice. During this process, we should recognize which basic common sense is important and which is less important.

Where there are deficiencies, we need to continuously deepen our understanding and learning, and improve step by step.

At this stage, do not be overly ambitious and invest heavily, because unexpected risks can lead to significant losses. Therefore, it is necessary to be cautious.

03. Establish your own investment system

Once you have enriched your basic common sense and have your own understanding of the market, you can gradually establish your own investment system.This is extremely important and critical; only after establishing one's own investment system can one truly begin investing.

Before this, we can learn from the investment experiences and insights of investment masters, constantly pondering why they are able to make money, what they did right, and what I should learn from them. (Here, one can learn from John Bogle.)

Then, by combining the correct experiences and methods of our predecessors with our own, we can summarize a set of investment frameworks and strategies that belong to us and can make money in the long term.

Based on this, one can truly be considered as understanding funds.

Summary

Fund management is not easy, and many people think it is too simple and idealistic, believing that anyone can make money. In reality, it is a world of difference.

Most people suffer losses because they do not understand funds. Once they truly understand funds, they can become a source of secondary income, and even rely on funds to completely cover daily living expenses.

There is no special skill in understanding or not understanding funds; the core is a willingness to learn and to pay, and naturally, one can progress from not understanding to understanding!

For those who have different opinions or ideas, I look forward to your comments!

Here, I will update fund management knowledge and common sense from time to time to help you avoid pitfalls. If you are very interested in funds, you can come and visit at any time!Like and follow for wealth to flow in abundance!

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