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Por … Demonstration Bowon Santisut, CFP Financial planners
Who says that if you are free? Time will pass slowly, if not true, stay home, stop the infection for the nation from March 22, the day the mall closes. For now, it’s only 42 days. And remember that during March many people complain about damaged stocks. In particular, people who bought RMF, LTF, or linked unit complained to an angry sales representative on March 23 that the Thai stock index closed at 1024.46 points, compared to year end 62 at 1,579.84 points, which is equivalent to a loss of 35.15%.
But just a month ago, Friday (April 30) closed at 1301.66 points, increasing from March 23 to 27.06% compared to the end of 2019, which is equivalent to a loss of 17.61%. Simply put, the loss has been cut in half.
This is even if the national bank is still evaluating the Thai economy this year at -5.3% (previously 2.8%). The IMF also emphasized that the Thai economy this year should grow by -6.7% (previously 3%). Next year is better. Isn’t the stock index bigger than this? (The national bank estimates that the Thai economy will grow 3% next year, while IMF estimates grow 6.1%)
Now when Thai stocks are even losing compared to last year But I always found people complaining that “I knew this …” all the time “You shouldn’t sell the shares at all” “You shouldn’t change the stock fund in Absolute “” At that time, you should buy the shares … “a different roll of film in March. But one thing I’ve learned is Many decisions are now reactive: when things happen, they make decisions. For example, if the stock falls, use the stock event to decide to sell the stock for fear of losing or seeing the stock rise and hurry to buy OR like coming to want to invest when you retire Because you realized you did not he had enough money to get ready This is what they call Can you break the cow?
The investment is actually Current Payments for Future Rewards We should not use past events as the primary decision-making factor. Because the past has passed Yes, it is only a decisive factor. When we should be proactive, look to the future and see what will happen. And then he decided how he expected to be. In the future, Thailand should have many older people. We invest in stocks or businesses related to the elderly, it should be good, but there are many things that we cannot predict that will happen like covid19 here … and so on. How to invest in this situation?
I found an article at https://passiveway.com/active-vs-passive-fund-2/ “Proactive VS Defensive Fund: This Battle Wins! When Warren Buffett Challenges the Hedge Fund”, it should give some good ideas too .
The story is that in 2008, during the hamburger crisis, Warren Buffett wanted to demonstrate to the world that Bring money to “professionals” like mutual funds and hedge funds. With active investment policies such as stock selection. Choose the time of the negotiation, etc. in exchange for such high rates In the long run, the returns will be lower than the purchase of passive investment funds betting with an amount of US $ 500,000 than in 10 years from January 1, 2008 to December 31. 2017, the Vanguard S&P, which invests in the S & P500, will generate a higher return than the average return that 5 hedge funds can get.
If Buffett wins All gambling funds will be donated to a charity of your choice, betting on hedge funds 5. The return on investment of each fund each year is as in the table below. Funds at Warren Investment Buffett is the bottom of the S&P Index (right column)
We’ll see that even in the first year (High Risk Crisis). The five hedge funds perform better than the index fund, but after 10 years, the S&P 500 Index Fund yields a total of 125.8%, representing an average annual return 8.5% in While average coverage earns an average return of just 3% per game year. Index funds are winners.
In summary, buying an index fund and holding it for a long time, no need to worry about whether the economy is good or bad, it is the best investment strategy. The reason comes from many reasons, such as expensive hedge fund fees. Trade Fees Most Traded The trading fee is much higher. Investment Time Capture Inaccuracies No one can buy at the cheapest point and sell the most expensive point at a low price all the time, etc.
The ideas of the competition that the article summarizes are
1. In some years, reactive funds offer worse returns, especially in critical years, but in the long term, reactive funds tend to be higher.
2. Capturing the rhythm of the mutual fund Having money waiting to invest Not a good long-term strategy. Compared to investing all the time with passive funds Because in the long term, the stock market provides more positive than negative benefits
3. Even more stock analysis And choose to invest deeply To expect good returns Instead, losing to passive funds That does not need to be analyzed Extend the risk of buying many shares
4. Trading stocks and strategies for profit Instead, losing to a long wait strategy. Passive funds
This article should be another idea that should be considered and what investment strategy is best for us. For anyone interested in the details, go read more from the website I gave you.
