Category: Money tips Release Date: 2006-02-04
Active investments refer to investors in order from the top down or bottom-up approach to asset allocation, industry configuration and choose stocks, select stocks such as timing, there is no considerable accumulation of knowledge and time is impossible. In fact, even in a professional asset management companies, to accurately based on the capital market is expected to be the most effective asset allocation is very difficult. The asset allocation needs to correctly predict macro-economic changes in future policy trends, future market trends and the correlation between the degree of the assets, which is not a virtue of many factors, quantitative analysis model will be able to grasp, therefore, be more like asset allocation an art. Relatively speaking, the industry configuration and choose stocks is relatively easy to learn more. In general, the fund company's research team will select a core stock pool, and then choose stocks in which the further.
Passive investment generally refers to mimic an index of investment, hope to get similar benefits with the index. There is a question of selecting the most appropriate index, for example, S & P500 is a very active and therefore a very appropriate indicator, but there are an index of the lack of representation, can not represent the mainstream market. There is also a practical implementation. For example, for an individual investor, even if the purchase of the card 50 such indicators, but also need to purchase 50 shares, buying and selling quite laborious. Therefore, investors will generally choose to carry out passive index fund investing.
The efficiency of the investment market is to determine whether we focus on the initiative of investment considerations. The level of market efficiency, investment and initiative will determine the relative performance of passive investment. In more efficient markets, mature markets such as Europe and the United States, due to information transparency, internal control by relatively strict control, stock prices basically reflect the company's fundamentals. Therefore, the initiative undertaken by the choice of investment shares difficult to obtain a lower return on the stock's efforts. The initiative, investments need to spend a lot of research and transaction costs, passive investment, such as the performance of index funds would be better but is a lot of investors should consider the variety. On the contrary, in the more mature markets, due to price does not reflect the fundamentals, the information transparent and timely disclosure of information and other reasons not entirely, the Institute has done a lot of work, such as intensive interviews with the relevant listed companies will help to find some undervalued companies to the investment performance of the initiative is better than passive investment. To China Taiwan as an example, funds in the past history, there are 3 / 4 of the fund than their choice of performance standards to prove that the initiative can be a positive return on investment. Taiwan investors proactive personality makes them prefer the initiative of investment products.
On the current China market, because of its maturity is not enough, and the market is really big, in such market conditions, it is quite intensive to visit the company, rather than to maintain good interactions to discover a good investment targets more effective. In this case, the need for adequate manpower and resources, it is difficult competent individual investors. Investors can make greater use of funds, professional asset management company, select the active type of product, in order to obtain better than the broader market gains. In fact, the past performance of the mainland fund industry has proved its overall performance can overcome the broader market initiative, although the higher rates of investment funds, but for bringing investors better returns than the broader market.
