- Financial ratio
Managing finances should be based on household-specific income. Although young people have a small income, their monthly income accounts for a large proportion of their total assets. They can choose wealth management products with high risks and high returns. At middle age, monthly income accounts for about 1% of total assets, so it should be suitable to choose a more robust investment product.
Graham, “the Godfather of Wall Street”, proposed the “75-25” rule in terms of fund management: the proportion of funds holding ordinary shares is controlled in the range of 25% to 75%, and cash and bonds are controlled in the corresponding complementary range. To be clear, this ratio can be adjusted according to the risk appetite of each household. When the stock assets exceed 75% of the total assets, the stock should be sold to return the ratio to the dynamic equilibrium of “75-25”.
- Cash management
Low-risk investors should understand the dynamic balance between stocks and cash-like assets. The more common cash management tools such as money funds, bank T + 0 wealth management, and reverse repurchase have almost no risk, lower returns, and are suitable for short-term fund management.
- Monetary Fund
Monetary funds have high security and liquidity, and stable returns, which protects investors’ principal from loss. Monetary funds can always grasp changes in interest rates and inflation trends, implement dynamic adjustments, and avoid losses caused by inflation.
High-quality money funds are large in scale, interest rates are higher than one-year time deposits, and can guarantee liquidity.
- Bank T + 0 Wealth Management
The main investment orientation of such products is government bonds, financial bonds, central bank bills and other financial instruments with high credit ratings and high liquidity.
- Reverse Repo
Banks (positive repurchasers) pledged bonds to customers (reverse repurchasers). The customers gave up the right to use the funds some time and received a definite interest income upon maturity. The reverse repo is the operation of the central bank to put liquidity on the market.
- Internet Finance
Internet wealth management, as an emerging wealth management product, has developed strongly in recent years. When choosing a wealth management platform, you should pay attention to the registered capital and background of the platform.
When the bonds are issued, the principal and interest paid upon maturity are stipulated, so the returns are stable and safe. Treasury bonds are guaranteed by state taxation, with the highest security, followed by various types of corporate bonds.
The domestic investment market is not perfect, and it is difficult for ordinary investors to predict changes in the stock market and it is easy to lose money. Therefore, seeking stable financial products is the goal of daily household financial management.