Why do most investors in China stock market prefer to buy their own stocks rather than stock funds? Is it because retail investors don't understand and have more confidence and recognition? Or is it because the reality of China's funds is not as beautiful as it is in theory?
China's securities market supervision is not perfect, there are many rat warehouses, and people generally distrust funds. And the income of many active funds is not flattering. The temptation of stock profiteering is also in line with the gambling character of China people.
In fact, the rat warehouse is talking about active funds, such as ETFs and index funds, which strictly copy the index, so it can be said to be truly open and transparent. It is much easier to buy industry indexes directly than to choose from thousands of stocks, and you don't have to worry about buying mining stocks.
Regarding the purchase of active funds, as long as the correct fund selection method is adhered to, there is little possibility of serious underperformance. Funds, like stocks, often depend on the market.
As we all know, retail investors rarely outperform the broader market, and buying ETF directly may be the magic weapon for retail investors. Perhaps this is why Buffett repeatedly suggested buying index funds.
I saw a set of data recently. The total market value of A shares is about 20 trillion. By the end of 13, the market value of publicly raised funds was10.3 trillion, and other private placements accounted for less than 15% of the total market value of A shares. Public Offering of Fund's net assets account for 73% of the total market value of US stocks. China is a veritable "retail market" and the United States is an "institutional market".
Many people ask me why I often recommend buying funds instead of stocks. In fact, the level of not buying stocks is really limited, and funds have many advantages over buying stocks.
First, it is really not easy to analyze stocks.
The number is too big. There are nearly 2800 kinds of stocks on the market now. It is time-consuming and laborious to analyze them one by one, and there may be a black swan incident. If you are optimistic about an industry, just buy the ETF of the industry directly, or buy Grade B directly if you are radical.
The analysis of financial statements of listed companies by value analysts is too high for ordinary people, and the analysis logic of enterprises in different industries is completely different. For example, the analysis of securities and pharmaceutical companies is completely different, and it is difficult to grasp the context of the company.
Even a master of value analysis like Buffett advises ordinary investors to invest in index funds.
I believe that investors who have studied technical analysis must feel this way. Technical analysis is not simpler than value analysis. Similarly, if you are an expert in technical analysis, you can only mark a few industry indexes and then buy the grade B of this industry, you can also get more excess returns.
Second, stamp duty can be exempted and the investment cost is low.
Compared with buying stocks, investment funds have a great advantage that they don't have to pay stamp duty. As the saying goes, saving is earning.
The low investment cost mentioned here refers to the varieties such as graded funds traded in the market. For example, if you buy securities B in the market, you only need to pay the same commission as buying stocks, and you don't have to pay stamp duty.
Third, retail investors can also leverage trading.
The threshold of margin financing and securities lending has been very high, and some retail investors are willing to pay high interest for fund-raising transactions in order to expand leverage. I want to say that the grading B of the grading fund has brought low threshold leverage to retail investors, and the cost is only about 6%, which is far lower than the financing allocation.
Fourth, T+0 trading makes investment more flexible.
A shares can't trade T+0, which has been criticized by investors, especially those who like short-term trading. The graded funds launched by the Shanghai Stock Exchange can realize T+0 transactions of buying on the same day, merging on the same day and selling on the same day.
Fifth, there are more ways to make profits and a wider investment direction.
If you buy stocks, you can only buy them, and then make a profit when the stocks go up. In addition to buying and waiting for the rise, funds can also make profits in many ways. For example, the tiered fund arbitrage mentioned above.
For example, when the securities B soared last year, the parent fund subscribed for the split grade B, which not only earned the difference between the net value and the price, but also enjoyed the rising income of securities stocks. At that time, you can get nearly 20% of the income in one day.
At the same time, the fund can also invest in US stocks, gold and bond markets. Don't wait for the bull market like buying stocks.