In fact, how many dimensions do investors in the world have? It is not as important as whether Jiangsu, Zhejiang and Shanghai guarantee postal services. Investors should pay attention to financial management. So, what are the dimensions of the world of investment and financial management, and is there a fifth dimension?
The first dimension: cost
"Cost" is the source of income and risk, and everything will follow, so cost is the first dimension. The first thing to do in financial management is to keep the cost, so the main purpose of many investors' financial management is to resist the erosion of their wealth by inflation.
To put it simply, stopping investing for profit is equivalent to losing a considerable part of wealth, and the proportion of loss is the current inflation rate. Under the current domestic inflation rate, in order to protect the capital, we must choose financial products with higher yield than the inflation rate. In addition to fighting inflation, the actual income is much higher than bank deposits, which can help you maintain and increase the value of your wealth.
The second dimension: income
Income can be said to be the fundamental purpose of investment. All investments are made to gain income. Just as the fundamental goal of corporate governance is to "maximize shareholders' interests", the goal of investment behavior is to obtain maximum income and realize wealth appreciation.
There are many ways to realize the return, but the return is different. The return on investment in virtual economy is higher than that on investment in real economy, and the return on investment trust and hybrid fund is higher than that on bank deposits. Investors must find suitable investment varieties according to their own needs.
The third dimension: risk
Not all investments will be profitable, but any investment will inevitably bear risks, but the forms and degrees of risks are different. The academic definition of risk is "uncertainty". As an investor, we must hope that the income is certain and the risk is minimized as much as possible.
In order to do this, we must first recognize the source, type and degree of risk. For example, the stocks in the investment banking sector will bear the industrial risks of the banking industry. Invest in stocks and funds and bear the market risk of the whole capital market; Investing in hybrid funds is to bear the overall macroeconomic risks.
Theoretically speaking, the more diversified the investment products, the smaller the correlation between investment products, and the smaller the risk that investors bear.
Fourth Dimension: Deadline
This term is also the investment cycle. Theoretically, the longer the cycle, the greater the income, because from the perspective of investors, interest is the compensation for giving up current consumption in the future.
However, in the actual investment process, the cumulative income of short-term compound interest often exceeds the long-term simple interest income. Therefore, investors must carefully consider and grasp the investment rhythm, otherwise, they will "miss Man Cang".
The fifth dimension: liquidity
The reason why "liquidity" is regarded as the fifth dimension is because it is most easily overlooked.
Liquidity is defined as "liquidity", that is to say, the liquidity of an investment product, such as "cash", is the strongest because it is "cash" and does not need to be realized, while the equity of a non-listed company is one of the most difficult investment products to be realized, because there is no buyer at any time.
Remind investors that liquidity is a problem that must be paid attention to. Although it is often easily overlooked, its importance can not be ignored, because the investment income can not be realized, which means no income. Only by grasping the "five dimensions" of investment and financial management can your wealth be preserved and increased in all directions.
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