I've heard that "fixed-income" products have a fixed return, so they must be guaranteed to preserve capital and pay interest, right?

This statement is entirely incorrect, and everyone must be cautious. Fixed-income products are not all guaranteed to preserve capital and pay interest. Today, I will enlighten you about the characteristics of these types of products to see what they are really like and whether they are worth investing in.

Firstly, fixed-income products are not necessarily guaranteed to preserve capital and pay interest; it depends on the specific product. We will discuss this later, but one thing is certain: compared to other products, fixed-income products have relatively lower risks, and the probability of preserving capital and paying interest is higher, but they do not necessarily guarantee full capital preservation and interest payment.

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So, what types of fixed-income products are there?

Based on the different types of products, fixed-income products are divided into four categories: deposit products, bond products, fund products, and wealth management products. Among these categories, deposit and bond products are fully capital-preserving, but fund and wealth management products may not be.

The deposit products are very familiar to everyone, such as term deposits, large-amount certificates of deposit, structured deposits, and so on. They are common deposit instruments, and we have discussed them multiple times in previous programs, so I won't go into detail today.

The second category, bonds, can be divided into government bonds and corporate bonds. Compared to the well-known government bonds, the safety of corporate bonds is entirely related to the creditworthiness of the company, carrying certain credit risks. However, overall, the risks are controllable, and the probability of default is relatively small.

As for the remaining fund and wealth management products, they are not the same thing at all. I will now explain them in detail for you.First, let's discuss the types of funds. Based on different classifications, funds can be categorized into money market funds, bond funds, index funds, and equity funds. Among these, money market funds and bond funds are generally considered fixed income funds due to their relatively low market volatility. Products we are familiar with, such as the spare change financial management offered by banks, Alipay's Yu'e Bao, and WeChat's spare change pass, fall into this category.

Although these products have relatively low market volatility and stable returns, potential risks still exist as the market continues to change.

What about the last category of fixed income financial products? Are they worth investing in?

In the past, fixed income financial products have always been highly focused on. However, after the implementation of the new asset management regulations, which prohibit the promise of principal protection in financial products, and with the occurrence of loss events in financial products this year, the popularity of fixed income financial products, which are also part of financial products, has gradually declined.

The nature of fixed income financial products is entirely determined by the fields in which they invest. Generally speaking, a product that invests no less than 80% of its assets in deposits, bonds, and other fixed income assets can be considered a fixed income product. However, on the other hand, fixed income products can also invest up to 20% of their assets in equity products such as stocks and futures. Therefore, in a poor market environment, if the stocks and other fields in which they invest suffer significant losses, it can still drag down the overall returns of the financial product, and even lead to losses.

How to choose fixed income financial products?

Since they are also financial products, the selection method is the same as what we discussed earlier for financial products, which can be roughly divided into four perspectives: risk level, expected return, investment scope, and asset management institution. Among these, the most critical factor is the risk level that everyone must pay attention to. This year, products with a medium-low risk level of PR2 have experienced losses, which requires everyone's attention.

In summary, with the introduction of the new asset management regulations, coupled with the continuous changes in the external investment market, the era of making money without effort is over. The "fixed income" financial products that were once claimed to be certain to make money are no longer as reliable. At this time, it is required that we must improve our level of understanding and only make a move after fully understanding the products we are investing in.So, how much do you know about fixed-income products? Do you think they are worth investing in?

We welcome everyone to leave comments and discuss together.

That's all for this episode. If you have any topics in financial management that you'd like to know more about, please feel free to leave me a message.