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In the new era of chinese socialism, the way farmers invest in finance will change significantly. Bank deposits are no longer the main way for farmers to invest in finance, and new technologies such as big data, financial technology, artificial intelligence and new tools will be widely used in farmers ' investment in finance. In response to the constraints on investment by farmers in financial management, a number of recommendations were made to focus on smart investment in financial management and achieve high-quality investment by farmers。
Keyword
Farmers; investment finance; smart investment
Farmers used to keep banks when they had money. For a long time, the nominal interest rate on our bank deposits was lower than the inflation rate (cpi), resulting in a negative real deposit rate. Negative interest rates necessarily result in farmers' interests being compromised and farmers becoming “poor” over time. How to enable farmers also to share the dividends of china's economic growth and get the returns they deserve commensurate with their risk tolerance is a problem that farmers in the new era must address in terms of investment management。
1. Constraints on investment by farmers in financial management
1. 1 lack of knowledge of investment management by farmers
In order to manage investment, it is generally important to have basic knowledge of investment finance and, preferably, of economic, financial and financial disciplines. Although compulsory education is now universal in rural areas, the enrolment rate in secondary schools is significantly lower than in urban areas, and the number of university-educated persons is still low. According to data from the national statistics institute, more than 85 per cent of the country's rural labour force is of lower secondary education and below, and less than 15 per cent of secondary education and above. In economically and financially well-developed cities, investment finance knowledge has entered the upper secondary level of textbooks, and a number of universities offer elective courses with investment finance. In rural areas of the country, most of the people who graduate from primary and secondary school enter the city to work, and the busy working life does not have the time to learn about investment finance, nor do they remain in rural areas to learn about investment finance culture and conditions. As a result, there is a general lack of financial literacy among farmers。
1. 2 poor risk tolerance of farmers
First, the level of social protection in rural areas is low. In rural areas, the participation of farmers in old-age pension insurance for urban and rural residents is voluntary, and pensions after participation are usually lower than those for urban workers. More farmers are not covered by old-age pension insurance for urban and rural residents, and at retirement age they will receive only minimal funding from the state budget, which is limited. With regard to health insurance, the new rural cooperative medical system is now being piloted in rural areas. Although farmers pay dozens of monthly contributions to cover the limited reimbursement of ordinary and major illnesses, the existing system does not fully address the real need for treatment for major diseases. With regard to other insurance, farmers do not have unemployment insurance, employment injury insurance and maternity insurance. Second, the wealth accumulated by farmers has not come easily. The vast majority of the wealth available to farmers is in rural areas, where they work hard and work hard in the cities, and where they have a great deal of blood and sweat, so that they are better valued. Once wealth is shrunk significantly, it can cause them deep pain. Available survey data show that farmers generally have weaker risk tolerance。
1. 3 limited investable funds for farmers
In recent years, more and more farmers have entered the city to work. As socio-economic development increases, farmers ' incomes to work are increasing and, together with rural land incomes (business income, drift income, share income), farmers ' incomes have increased significantly. Data for the last five years show that the disposable income of the rural population has steadily increased and is growing rapidly. In 2017, the disposable income of rural residents amounted to $13,432, increasing faster than that of urban residents. At the same time, per capita consumption expenditure by rural residents is lower than per capita disposable income, and cumulative funds have increased. Although the wealth accumulated by farmers is increasing, there are too few remaining investable funds to meet the vip standards of the financial institution (usually 500,000), beyond the funds needed for short-term housing construction, marriage and medical treatment, the purchase of production resources, the funds available for university students, daily living expenses and emergency funds。
1. 4 poor investment awareness among farmers
Farmers do not have a sound concept of investing in finance, nor do they have a strong sense of investing in finance. According to the survey data of jiangsu dung county, more than half of the villagers considered it unnecessary to invest in finance, and only 11 per cent considered it necessary. The results of the survey on the financial awareness of farmers are similar across the country. The financial times quoted a report from the puppy study that most farmers ' perceptions of investment finance are limited to savings. In addition, the general rural climate has affected farmers'sense of investment. In the cities, financial institutions such as securities, banks and others have set up financial management departments, and the media has widely publicized the idea of “you don't care, you don't care”. In rural areas, financial institutions are still not providing access to financial services, which, combined with poor rural access and information, have resulted in few farmers investing in financial resources and a favourable investment climate。
1. 5 different targets for investment in finance per farmer
Since each farmer has different risk tolerances, different investable funds and different investment durations, investment finance objectives necessarily differ. In terms of return on investment, there are hopes that interest on bank deposits will be slightly higher, hopes that there will be no devaluation (to overcome inflation), and hopes that there will be slightly higher returns on bank administration. In terms of specific objectives, some are for the education of their children, some for the purchase of a house for marriage, others for old-age security, etc. None of the types of finance that rural financial institutions can now provide are suitable for all farmers。
2 characteristics of farmers investing in finance in the new era
2. 1 full use of financial big data
Financial institutions such as rural credit unions and village banks are those closest to farmers. We have limited access to financial data, limited by the skill of these financial institutions. But there are tens of thousands of listed companies in the global financial markets that trade on a daily basis for hours or even 24 hours without interruption, generating massive financial data. Many of these financial data are not directly accessible to us, and only processed property can be easily used. Financial institutions, represented by the bank finance sub-company and the foundation corporation, process these data into various types of property management items, at which point they may select the appropriate property management items for my use. There is a large number of existing properties, thousands of banknotes filed by the cvm alone, thousands of funds recorded by the cvm and a large number of other financial institutions. These tens of thousands of pieces of property, we must be able to find by technical means a property that is best suited to farmers' friends。
2. 2 financial technology and artificial intelligence to help farmers invest in finance
Farmers generally lack the knowledge and experience to invest in finance, and it is difficult to earn money in the process of investing in finance, especially portfolio investment. Financial technology makes investment finance easier. Financial technology, represented by quantitative investment and proceduralized transactions, can help investors to select the most suitable stock (or fund) for investment, automatically conclude transactions when they reach the point of sale and help investors to lock in profits. By way of example, the smart investments introduced by a financial institution can help investors to sell automatically when they have more or less access to low-value, high-value, and profit-making targets, as a result of being embedded in a procedural trading system, thus enabling farmers with little knowledge of how to invest in finance to obtain stable returns over the long term. In recent years, artificial intelligence, represented by in-depth learning, has begun to be used in investment finance. In the course of equity investments, artificial intelligence, imitating the investment philosophy, investment habits, stock selection and trading practices of a large number of good investment managers, assesses market trends on the basis of big data and decides when to buy and sell independently, with good performance. In the course of the investment consultants ' work, artificial intelligence is able to map different clients accurately and provide individualized solutions. Assets are allocated, funds are selected, and the warehouse is automatically adjusted according to their risk tolerance, investment duration, investment preferences, etc. If a large number of farmers are also able to use smart investments to help manage their finances, they will also be able to obtain good returns that are stable over time。
2. 3 the internet finance platform is the main channel through which farmers invest in finance
Internet finance can be either internet technology + finance or financial + internet, but must have a large number of users, and its platform companies (or their parent companies) are best listed. The former is like an ant gold suit (payment treasure under the flag) and the latter is like a daily fund. The parent company, alibaba, of the ants gold suit, is an internet technology company listed overseas; the parent company of the day-to-day foundation, orient wealth, is a domestic financial company. As listed companies, it is easier to finance from capital markets and to attract the best scientific and technological talent to join companies for research and development and to develop a large number of financial assets for investors to choose. At the same time, the availability of a large number of users makes it possible to provide customers with alternative assets at low cost. In the case of financial institutions such as rural credit unions, village banks, they can neither provide large data support for farmers to invest in finance nor provide farmers with the best property items at low cost. Farmers must therefore invest in financial management to break the constraints of territorial financial institutions and embrace internet finance. On the internet financial platform, choose the property that is best suited to itself. Of course, if a farmer's friend has one year to spend, there are still rural financial institutions that can be easily accessed. However, if idle funds are not available for more than a year, investments should be made mainly through internet finance platforms to provide farmers with medium- and long-term stable returns。
3 recommendations for achieving high-quality investment by farmers in the new era
3. 1 investment varieties away from high risk
Equities, futures, usury, etc. Are highly risky types of investment. The vast majority of farmers, who have lower risk tolerance and lack the knowledge and skills to invest in finance, should not touch such investment varieties. In the stock futures market, there are 721 laws: in the long run, 7 out of 10 investors earns 2 per cent. Some farmers participate in high-risk investment varieties such as stock futures, despite their low risk tolerance. It was reported that shaanxi xingping used to have a “share village” in which 800 villagers, nearly 100 of whom were in stock, lived in cattle town in 2015. Economists and friends in the public media say, "it's really hard to make money when you're out of stock." ... The average white entry into the market is tantamount to a very small chance of survival with a spear in a heavy machine gun position.” that view was widely shared. Most farmers are investing in white paper, so the final outcome of farmers like shaanxi xingping ping can be seen. Even if a small number of farmers earn money on luck, they lose. It has also been reported that sichuan peng county, which has for over a decade had a reputation for being a farmer, started with tens of thousands of dollars, with courage and luck, and managed to do up to tens of millions; it then attempted to make more risky futures, not only by losing all of its property, but also by bearing more than 3 million debts, and then attempted suicide due to excessive pressure. Some farmers are also involved in loan lending (including high-interest p2p) and investment projects that are committed to high returns, which are likely to yield high returns in the short term, but many end up losing their principal. Large numbers of farmers must put risk prevention first when investing in financial management。
3. 2 intelligence is entrusted with management
Most farmers have limited investment funds, do not meet the standards of vip clients in financial institutions and cannot be allocated to exclusive investment advisers. Without the help of investment advisers, it is difficult to earn money in the course of investment management because most farmers lack the knowledge and skills to invest. A number of financial institutions have introduced smart investment services, which typically represent the “help you” of a certain treasure, or the “carer of a certain fund”. In the case of a fund's “basketkeeper”, smart investment can automatically allocate assets according to the investor's risk tolerance, investment duration, investment preferences, etc.; select high-quality funds at a market-wide level of more than 10,000 funds; automatize on an irregular and dynamic basis, based on asset allocation models, strategy performance, risk forecasting, etc.; and provide a full-time accompanying service. If farmers entrust investable funds to smart investments, the troubles of asset allocation, fund selection, and timing are reduced, allowing smart investments to help farmers achieve stable medium- and long-term performance returns and to share the dividends of china’s economic growth。
3. 3 investment and low risk active fof
Fof is the abbreviation of fund funds (funds in funds). There are more than 4,000 listed companies in the chinese market and nearly 10,000 funds. Investor investment funds are intended to achieve their benefits at lower risk, but it is more difficult to choose a good fund than a stock. The initiative fof, whereby fund managers help investors to select excellent funds from a wide range of funds, addresses the distress of investor selection; at the same time, it also helps investors in asset allocation, timing and warehousing, with good medium- and long-term investment performance. Although active fof investments in the medium to long term have worked well, not all of the targeted fofs are suitable for farmers to invest in finance due to the low risk tolerance of large numbers of farmers, but only the medium to low risk pfos. The medium- and low-risk public fund-raising fund, which had been in existence for three years, had performed well, with an annualized return of over 8 per cent. For example, the annualized rate of return was 9 per cent (as of 30 june 2021) and the maximum withdrawal was only 5. 5 per cent, with good risk control. While such an excellent medium- and low-risk fof can be selected, if only the average medium- and low-risk fof is chosen, the investment of large numbers of farmers in financial management will also yield stable long-term performance returns。
3. 4 smart performance fund index
The master of investments, buffett, recommended index funds to ordinary investors on numerous occasions. In his view, investing in a passive mainstream broad-based index fund would yield better returns in the long run than most professional investors. But the index fund recommended by buffett had the premise that the stock market was short for the long term. Our past stock market has been long-standing and does not qualify for the buffet recommended index fund. Do we have short investmentable indices for long-term cattle bear? The conclusion is positive. Bonds (or bond-based funds) index, hybrid fund index, active equity fund index, etc. Are short-term indicators validated by historical data. There are too few index products developed by financial institutions that are suitable for farmers ' risk preferences. The bank of commerce and industry developed a mix-and-share index, and the central mail balance and physician index, developed by the bank, are a few indicators suitable for investment by farmers. These indicators are characterized by lower or moderate risks and higher risk returns. Intelligent investment is a procedural trading system that ensures long-term robust profitability by allowing investors to buy more and less at a low level and to stop or lose when conditions are met. Robust farmers can make smart investments in the configuration or medium-mail balance index; balanced farmers can make smart investments in the mix。
3. 5 investment target surplus items
The reason why farmers prefer bank deposits is because bank deposits are simpler, safer, and the three returns are expected to be clear, as if the interest rate on bank deposits in a one-year period was around 2 per cent. If there is a property similar to bank deposits and the expected rate of return is higher than the deposit, the farmers must have preferred it. The annualized rate of return on targeted surplus-management products, usually between 5 and 8 per cent, is comparable to the average annual growth of china’s GDP in the future, suggesting that farmers’ investment in finance can also benefit from the dividends of china’s economic growth. Targeted surplus items are subject to a “receiving plus” strategy, whereby they are invested primarily in fixed-income assets, supplemented by increased income elasticity with equity assets in due course. Managers seek to pursue long-term stable returns with strict risk control, usually for a period of one year with a period of observation. When the annualized rate of return is reached upon the expiry of the observation period, the surplus will cease in a timely manner or funds will be available or automatically transferred to the next period by the end of the period of operation. Farmers with high financial security requirements and with more clear expectations of investment returns can choose to invest in targeted surplus items。
Conclusion
Investment finance is a very professional thing. Farmers who do not have the knowledge and skills to invest in financial management should primarily help to invest in financial management through smart investment in order to achieve long-term, stable returns on performance. Different farmers have different investment preferences, and there are multiple ways of investing in finance. Either way, investment management should be premised on risk control in order to gain a good investment experience. A combination of financial management approaches, based on smart investment in finance, leads to high-quality investments by farmers in the new era and better future lives for farmers。
