Should you hold or redeem a financial product that loses money? You need to understand this point clearly →
2024-08-16
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Recently, the net value of some financial products has retreated, and the phenomenon that investors do not want to see, "losing money yesterday", has reappeared. Faced with financial products that lose money, should they continue to hold or redeem immediately? Some investors are undecided. At this time, it is very important and necessary to understand the logic of the rise and fall of financial products.
Some people may ask, why did the previous wealth management products not "rise and fall", and will I get an agreed return when they expire? In fact, the previous wealth management products also rose and fell, but they were "managed" by the managers. Before the release of the "New Asset Management Regulations", bank wealth management had rigid redemption - the market was changing at any time, but the final return of wealth management products remained unchanged. How is this done? The manager used the "good" of high-yield products to make up for the "bad" of low-yield products. In this way, investors did not enjoy additional returns, the manager took on the remaining risks, and the hidden dangers of systemic financial risks increased. After the release of the "New Asset Management Regulations", wealth management products started the net value transformation, regularly disclosed the net value of unit shares, and the net value followed the market, rising or falling. All the previous additional returns belonged to investors, but the risks were also borne by investors.
The rise and fall of the net value of financial products depends on the rise and fall of the returns of the underlying assets. In simple terms, the so-called underlying assets refer to the specific assets in which fields the financial products you purchased invest their money. Generally speaking, when the prices of these asset combinations rise, the net value of financial products will also rise, and vice versa.
When choosing financial products, investors should focus on the underlying assets of the product and rationally analyze its rise and fall logic. How to analyze the underlying assets? According to the direction of capital investment, financial products can be divided into four categories: fixed income, equity, commodities and financial derivatives, and mixed. For each product, investors can read the product manual carefully, focusing on the "investment scope" to see clearly the asset category, investment ratio, investment strategy, etc.
At present, investors should pay special attention to those high-yield wealth management products that are "promoted". The "China Monetary Policy Implementation Report for the Second Quarter of 2024" recently released by the People's Bank of China pointed out that since the beginning of this year, the annualized yield of some asset management products, especially bond-type wealth management products, has been significantly higher than the underlying assets. This is mainly achieved through leverage, and there is a large interest rate risk. When the market interest rate rises, the net value of related asset management products will also fall sharply.
Investors should establish a scientific and rational investment philosophy, carefully evaluate and comprehensively weigh the returns and risks of financial products. Among them, we must adhere to the principle of matching returns with risks. When seeing "high returns", we must first think of "high risks". At the same time, financial product managers should better adapt to changes in asset prices in the financial market, scientifically formulate investment strategies, provide appropriate products and high-quality services for various investors, and better meet investor needs.
(Author: Guo Ziyuan), original title: "Understanding the logic of the rise and fall of financial products"
Source: Economic Daily
