Is money fund suitable for long-term investment?
Monetary fund is not suitable for long-term investment, it is more suitable for short-term or medium-term financial management tools, or as an asset allocation tool for diversified investment. The income of money fund mainly depends on the change of market interest rate. Generally speaking, when the interest rate rises, the income of the money fund will rise. Money funds are characterized by low investment threshold and good liquidity, but the opportunity cost of long-term investment in money funds is high, and it is easy to miss other wealth management products with higher returns. In addition, the income of the money fund is greatly affected by inflation. If inflation is high, the real income of the money fund will decline.
What are the advantages of the money fund?
1, low investment risk. Money fund is a low-risk wealth management product, which mainly invests in short-term bonds, bank deposits and other money market instruments with high security and strong liquidity, and the possibility of principal loss is very small.
2. Stable income. The income of money fund mainly depends on the change of market interest rate. Generally speaking, the market interest rate will not fluctuate greatly, so the money fund can provide relatively stable income. Moreover, the money fund will calculate the distribution income every day, which can realize the compound interest effect and improve the yield.
3, flexible and convenient, and many purchase channels. Money funds are basically open-end funds, investors are very free to purchase and redeem, and the fund redemption time is very fast. Some money funds can even apply for redemption on the same day and receive it on the same day. In addition, investors can also purchase money funds through various channels such as mobile banking APP, Yu 'ebao, and change money.