The positive returns brought by the recent "Trump trade" craze have rekindled investors' enthusiasm. Faced with many investment options such as stocks, cryptocurrencies, gold, etc., investors need to strike a balance between potential returns and risks when making choices. Only by understanding the characteristics of different mainstream asset classes can we formulate appropriate investment strategies.
Stocks: Buying a company's stock allows you to share in the company's future profit growth. Stock prices fluctuate greatly and are easily affected by the company's business performance, market sentiment and economic conditions. They are high-risk, high-return investments.
Index: An index measures the performance of a group of stocks over a period of time (such as the S&P 500 or CSI 300). An index includes many companies and can better reflect the overall performance of the market. Indexes are usually relatively volatile and are suitable for investors who seek long-term stable returns.
Cryptocurrency: Cryptocurrency (such as Bitcoin and Ethereum) is a digital asset based on blockchain technology. Its price is highly dependent on market sentiment, technological innovation and policy orientation, and is extremely volatile. It is suitable for investors with high risk tolerance and pursuit of super high returns.
Gold: Gold is a recognized safe-haven asset. Its value usually rises during periods of economic instability and its volatility is relatively low. It is the first choice for asset preservation, but the returns are relatively limited. Investment can be made through physical gold, futures trading, etc.
Foreign exchange: As the world's largest financial market, foreign exchange transactions involve the buying and selling of currency pairs (such as the US dollar/euro), which are significantly affected by global economic policies and exchange rate fluctuations. Investors are required to have rich experience and strong risk tolerance.
Commodities: covers raw materials such as oil, natural gas, agricultural products and metals. Their prices are affected by supply and demand fundamentals, macroeconomic conditions and geopolitical situations. They can be invested in through futures markets or related funds, and are subject to higher risks and volatility.
ETF (Exchange Traded Fund): A fund product that tracks a specific index, industry or asset class. It has the trading flexibility of stocks while achieving risk diversification. It is suitable for investors seeking asset diversification and focusing on liquidity.
Bonds : Lending money to the government or enterprises in exchange for a fixed interest return and a promise to repay the principal is considered a relatively safe investment channel, but the returns are relatively fixed and limited.
Funds : Managed by professional fund managers, they invest in a variety of assets such as stocks and bonds. They are suitable for investors who lack investment experience or want to achieve asset allocation. However, fund performance is affected by market fluctuations, and management fees will erode some of the returns.
