When Novices follow Warren Buffett
Why the world investor like Warren Buffett recommends investors to invest in Index Fund! The answer is he foresees that general investors will get good profits from Index Fund that charges low fees. In managing Index Fund, the Fund managers don’t need to invest in individual stocks so the fee is lower than other funds. For other funds, the managers need great effort and they’ll earn huge compensation while investors receive relatively low profits.
That’s why Buffett believes that long-term investment in Index Fund will earn much more profits than any other funds. He said that only about 10 people who invest in another type of funds will get more profits than Index Fund, and he insists on investing in lower fee funds.
Besides, Index Fund consists of good and basic fund recommended by The Stock Exchange of Thailand so it doesn’t require much effort from the Fund managers. Index Fund has good diversification as most stock indexes include a large number of stocks. Therefore, holding Index Fund is to diversify your investment in a huge amount of basic funds so port investment doesn’t rely much on any particular fund. In Thailand, most Index Funds invest in stock indexes like SET50 Index, SET100 Index, or Industry Index groups such as Energy, Commercial bank, etc.
Investment through Index Funds for novices is easy as it follows the current economic situation. If the economy is good, the stock market will adjust higher accordingly and Index Fund tends to rise as well. If the stock market goes down, Index Fund will certainly follow that. In fact, long-term and regular investment in Index Fund is averaging risk and averaging up and down price.
Even though Index Fund generates many benefits but it has limits. As Index Fund focuses on arranging port and profit return is aligned with index, investors have rare chance to win the overall market or the index because profits depend on marketing situation.
If you want to invest but have no experience, we’re pleased to introduce you to an investment service unit at SCB. At present, we open a full line of “Open Architecture” Mutual Fund through the Easy Invest App. Opening just one account, you can buy over 1,200 Mutual Funds from 17 leading Asset Management companies in Thailand and overseas and you don’t have to submit additional documents. If you want to buy a new Mutual Fund from a company that you never have an account with, you can do so and don’t need to send documents for additional accounts. Also, you no longer need to open many accounts. Customers can choose to invest in a variety of assets and can easily and rapidly achieve investment goals.
For more information, please study Easy Invest App at http://www.scbs.com/easyinvest or download Easy Invest App to explore the world of investment.