Success Diary #18: How to Choose Funds

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Success Diary

Private equity: pe (private equity) pc (personal financial counsellor) 🔗︎

Higher requirements, higher risk.

Public funds: 🔗︎

  • Currency funds: time deposits Lowest risk

  • Bond funds: US bond funds are recommended as follows

    • BND: Diversified bonds with low fees of 0.02% Monthly dividend payments
    • TIP: High dividend against inflation Annualised about 7.3% Monthly dividend payment
    • TLT: The most certain investment target in a cycle of interest rate cuts and pays dividends at the beginning of each month Tracks long term treasury bonds.

  • Equity Funds: A-shares are less passive than active, the opposite is true for U.S. stocks. U.S. stocks choose passive.

    • Active: market has 8%-20% share Select industry Select fund manager (years of experience, business volume, company, performance) 4433 principles
    • Passive: the market has 6%-8% share such as etf (exchange traded fund) /lof (listed open-ended fund)
      • etf management fee is low (0.3% - 0.5%) transaction costs 0.2% or so (linkage costs are high, direct investment eft funds, there are subscription and redemption fees) such as the U.S. stock voo/qqqq is an index fund
      • lof management fee generally 1.2% - 2