Comparing stocks, funds and bonds, what is the true level of risk for all three?

The most risky are stocks, followed by funds and then bonds.

For those who want to make an asset allocation, the first thing to understand is the risk of investment products is the first thing to do, because all of them will directly determine whether or not their principal will suffer a loss. Only to keep our principal, we can talk about the so-called return. Each person's ability to bear risk is different, and the investment character is also very different. So there is no such thing as the best investment product in the world, only the better ones that are relatively suitable for you.

One of the biggest investment risks in stocks.

If we look at stock funds and bonds alone, stocks have the greatest investment risk. In the bull market, we can see that stocks have the biggest increase, which means that the investment in stocks has the highest return. But risk and return in the investment market are often directly proportional, and the investment risk of stocks has been very high for many ordinary retail investors. We can generally understand the retracement rate of stocks as more than 50%, and can even reach 90% in some extreme markets.

Two, the investment risk of the fund is relatively reasonable.

We can understand holding funds as holding stocks by holding funds. There are many types of funds, both active funds like equity fundsand hybrid funds, as well as passive funds like bond fundsand index funds. In other words, you can choose a fund product that suits your investment strategy based entirely on your investment preferences.

Three, bonds have the lowest risk.

The bonds we often refer to are generally corporate bonds and treasury bonds, which are relatively high risk, but treasury bonds are actually very low risk. If we stretch it out over time, the average retracement for bonds is around 5% annualized, and the annualized yield generally stays between 1% and 3%. There is a term called stock and bond rebalancing, for the small partners who can flexibly allocate their assets, holding an appropriate proportion of bonds can minimize our investment risk, but also ensure our investment return.