| What about the funds during the bear market? |
|
|
|
|
Whether the fund could lose everything? Is this a good time to invest in mutual funds? - Such questions by asking themselves now many investors. Open Finance is responsible for the most common. Drastic declines in share prices on world exchanges, which are fruit of the financial crisis started in the U.S., gave a strong and investors in the characters over the Vistula. Particularly suffered the holders of units of investment funds, particularly those who began investing in the years 2006-2007. Although in the past year, many of them have withdrawn money from the fund, despite the Association of Investment Funds (TFI), still have a large crowd of customers who are watching with increasing desperation, as their life savings melt overnight. They often seek advice, directing questions to the experts. At the most repeated answer below. A year ago, invested in an equity fund and has already lost half the money, what can I do? Sell or wait? How long funds can take homework past losses? Purchase funds more or less a year ago, the investment made "on the hill, at the very top of rises. We know this, of course, looking back in time. Since that time indices on the Warsaw Stock Exchange has already depreciated more than half in the opinion of most analysts have reached the bottom of the falls, or is it close. This would mean therefore that we are close to the "hole". Since buying "upstairs" and sell "the hole" is a non-compliance not only with the basic principle of investing, but simply contrary to logic, it seems that the redemption of units is a bad idea now. The fact is that the more people feel that the stock market reached bottom, the more likely it is that it is. Guarantee does not, however, has none. It may happen that the share price to fall further. It's what to do, depends primarily on the approved investment horizon. Currently it looks like that on reflection you will have to wait a bit, maybe even a year, while recovering from or to revert to the levels before the year is unlikely to occur sooner than in 3-5 years, and perhaps even later. If individual investment horizon is much shorter, and the money will already have a specific purpose and we know that soon we will need to remain two possibilities. First, if possible, the planned purchase could be financed in whole or in part of the loan and leave the investment, hoping that future profits offset the additional costs resulting from the need for a drawdown. Second, you can come to terms with loss and withdraw money. In the first case, you must calculate what we would have to be profitable, so they compensated for the cost of credit. In turn, opting for the redemption of units is worth doing it gradually, in installments (eg every week), rather than all at once. This reduces the risk of hitting a "hole wells. In a better situation are those who also began investing last year, but with this difference, that did not have any capital, and only began to gather, such as opening a regular savings plan to fund. Of course, they also lost, but in their case was not one particular moment of entry (ie the purchase of fund units), because the process was staggered. With each subsequent month for the same amount regularly delayed, they procure an increasing number of individuals, lowering their average purchase price. The same reasons that make forgiveness fund units now seem very reasonable, increase the attractiveness of funds for all those who have only to start investing. Chances to "the hole" can now be assessed as big, but it is also certain "but". Economists and policymakers ensure that the Polish economy is in good shape, just like our banks and overall financial system as a whole. But we can not forget that the dynamic economic growth takes place mainly due to domestic demand, supported by rising incomes and a large action credit. In view of the global financial crisis, Polish banks have begun drastically exacerbate credit conditions, which can cause significant slowdown in GDP growth. Nobody knows for sure how much this will impact, but the forecast for next year are becoming lower. Also, the deteriorating situation in the U.S., and especially in Western Europe, will impinge. The European Union is our main trading partner. Problems of our neighbors are also our problems, which perfectly illustrates the example of standing on the threshold of recession, Germany, which gets about one quarter of our exports. How world events affect our economy, we shall most likely in the coming months. You must keep this in mind, trying on the investment and remember that what is suddenly the devil. The most significant issues that must be resolved before any decision is the individual propensity to risk and investment horizon. The tendency is greater and the longer the horizon, the more attention should be paid to funds involving assets mainly in equities. As far as lowering the threshold for acceptance of risk and / or shortening the investment horizon, greater emphasis should be put in safer instruments, that is - in order from more to less risky - balanced funds and stable growth, the protection of capital, bonds and money market. However, investments in which there is no hurry. That is why - especially having a larger amount - shopping should be distributed in installments. In the current situation would be best to distribute them at least half a year. Such a procedure averages and optimizes the purchase price with rates ranging firmly. Nor can we forget that "do not put all eggs into the same basket." Instead of a single fund a particular category, choose a two or three - shrink in this way the risk that the fund that can handle the worst. Better or not invest everything in a single class of assets, for example, or in equities, but spread the risk between the funding of various intensity. One from the basic properties of mutual funds is diversification, ie diversification of investment portfolios. It is described in great detail in the relevant statute, but it roughly boils down to this, that the Fund may not invest more than 5 percent. assets in securities issued by one entity (not applicable to the Treasury). This means that the average fund in the portfolio is at least a dozen, in practice, usually several different positions. As an example, take one of the fund market mixed, whose assets slightly exceed PLN 500 million, making it a medium-sized fund. At the end of June. in its portfolio shares were 54 companies and 14 series of debt securities (mainly government bonds). To this fund has lost everything, the value of its individual investments would fall to zero. Would therefore go bankrupt both the state and dozens of smaller and larger companies listed. Although theoretically this is of course possible, but it should ask itself what are the chances that happened almost 40-million to the State in the middle of Europe? Is the money in the fund are safe in case of bankruptcy of a bank or investment fund? Legal regulations, modeled on the best practice operating in developed capital markets, fully protect the interest of fund members. Each fund has a distinct legal personality and is not part of the assets of any institution, but only those who have invested their money in it. These measures do not go to your investment fund, only to be deposited in the so-called. depositary bank, which may not be associated with capital investment fund. TFI tasks are limited to the management of the fund, or carry out orders to buy and sell financial instruments. It is not possible, for example, a worker poured a private investment fund account money collected in the fund. Participants in the Funds are also protected in the event of trouble the depositary bank. According to the Act, the assets held by the fund or payments made on his behalf may not be the subject of targeted enforcement against the depositary, do not fall into bankruptcy and can not be under a recovery. This means that in case of bankruptcy of a bank that holds the assets of the fund, which invested our money is completely safe. |
| Next > |
|---|