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[Beginner-friendly] Let's understand the essence of investing! Vol.2

[Beginner-friendly] Let's understand the essence of investing! Vol.2
Last time,
It is not necessarily required to have investing sense in order to be successful in investments.
What is needed is to correctly understand the essence of investment.
There are mainly three essences of investment, and one of them is that investing primarily in fundamentals does not pay off in proportion to the time cost.
We talked about that.
For those who haven't read it yet, please read it from the previous article.
This time, let's take a look at the continuation of that, the second and third essences of investment.
5: Essence of Investment B: Understanding the difference in time horizons
5_1: Difference between long-term and short-term investments
投資には「Long-term investment」と「短期投資」があります。
長期投資は、数年〜数十年のスパンで資産を増やすことを目指すもので、短期投資は、数日〜数ヶ月の短い期間で利益を得ることを目指します。
何をもって長期、短期かは人によって異なりますが、大事なのは「長期投資と短期投資は全く異なる時間軸」だということです。
何を当たり前のことを・・と思うかもしれませんが、多くの個人投資家が
・I am in a situation where I am using the same tactics and methods for both long-term and short-term investments.
・I do not make a clear distinction between long-term and short-term in the first place.
・I only do either long-term or short-term investments.
I am in a situation where I am either only doing long-term or short-term investments.
5_2: Trap of Long-Term Investment
In long-term investments, there is a tendency to predict the "future stock price" based on the "current fundamentals." However, no one knows the future. Regardless of the current situation, future stock prices are unpredictable.
I've written about this before extensively.
5_3: Importance of Short-Term Investment
短期投資の結果の積み重ねが、最終的には長期投資の結果を形成します。短期での売買のタイミングを見誤ると、長期的に見ても大きな損失につながる可能性があります。
長期に罠があって短期が重要だと書くと、投資は長期ではなく短期で行うべき・・と思われるかも知れませんが、それは違います。
ココで言いたいのは過度に
・投資は長期で行うべき
・短期やデイトレは悪
のような古い価値観のまま投資・トレードに向き合っていてはだめなので、そうではないと示すための説明です。
重要なのは、投資・トレードにはそれぞれ長期・中期・短期と異なる時間軸があって、これを組み合わせた投資戦略を建てないとダメThat is what it means.
For example,
Long-term: RSP investment
Long-term: Aim for dividends, long-term swing trading of individual stocks
Medium-term: Ride on thematic individual stocks, medium-term swing trading
Short-term: Hedge with futures or options, or jump on trends
In this way, different products and strategies should be practiced based on the timeline.
Generally, 70% long-term, 30% short-termThe degree is safe, but it varies depending on investment history, age, asset amount, and time available for investment, so everyone should consider this individually.
5-4: Diversification of the portfolio over time
Are you all firmly grasping your own portfolio?
Investing should be diversified! Many people may be diversified in Japanese stocks, overseas stocks, Japanese bonds, US bonds, REITs, gold, etc., according to the teaching of diversification.
Furthermore, among stocks, you may be diversifying into various stocks by sector or factor.
This is important to diversify, but the problem is " not diversified over time".
As mentioned above, it is important to diversify assets over the long term, medium term, and short term. The tactics for long-term investing are completely different from those for short-term trading, as well as the products used.
Diversification of investment products and sector diversification within stocks is merely "horizontal diversification".
Diversification over time is "vertical diversification".
I think that most people are not diversifying vertically.
Institutions and large investors hedge their assets by adding vertical diversification to horizontal diversification.
First, please check your current investment portfolio yourselves and see if vertical diversification is possible.
6: The Essence of Investment C: Pursuing Simplicity
6_1: Simple investment strategies are effective.
You don't need to learn difficult theories or complex analytical methods to succeed in investing. Rather, it is important to practice simple and replicable strategies.
6_2: Do not be swayed by theoretical stock prices.
There is a concept of theoretical stock prices,but no matter how much you calculate, the actual stock price does not move accordingly.This is the concept of theoretical stock prices, but no matter how much you calculate, the actual stock price does not move accordingly.
"Even if you theoretically think, 'This stock is undervalued!', the stock price will not rise unless the market evaluates it that way. This is A trap that can also occur in value stock investments, theoretically undervalued based on the theoretical stock price! Undervalued in the value index! Even if you invest in it as being "cheap only", that can be the case."
6_3: Practice is more important than extensive knowledge
Theoretical stock price is, as the name suggests, the stock price seen from a theoretical perspective.
But in reality, it's different, isn't it? It doesn't become the exact stock price and we might not even know when it will become so.
However, it may not be attractive to people who understand the essence, even if it only looks cheap in theory.
There are people around us who say, "That person is good at studying but not efficient at work," right?
Moving quickly based on real-world data (charts) is far more important than delving deep into theory.This is a discussion from the perspective of ordinary individual investors...
6_4: An example of a simple investment tactic
Trading strategy using moving average lines
Buy when the price crosses above the moving average line, sell when it crosses below.
Utilization of support line and resistance line.
Buy when the price drops to the support line, sell when it approaches the resistance line.
Just by strictly adhering to such simple rules, you can achieve good results efficiently.
I highly value the "5MA cross of rise/fallUsing the simplest tactical strategy with moving averages as the base, without using complex charts, just trading based on the '5MA Cross' of uptrends/downtrends can be profitable annually. However, since there are many signals and consequently some fakeouts, I combine it with other charts to increase accuracy.How was that?The base is Granville's Law, which uses the most simple moving average line tactic.How was that?"."
Using the simplest tactical strategy with moving averages as the base, without using complex charts, just trading based on the '5MA Cross' of uptrends/downtrends can be profitable annually. However, since there are many signals and consequently some fakeouts, I combine it with other charts to increase accuracy.
Summary
How was that?
I'm only writing obvious things, but in this age of information overload, have we lost the obvious and spent time on things that deviate from the essence?
[In] my 20s, early 30s, I was exactly like that, and I wasn't consciously protecting all three of these [things].
To succeed in investing, it is more important to understand the following three essences than to pursue 'investment sense' or 'advanced theories'.
Don't be swayed by fundamentalsChoosing good stocks is important, but timing the investment is determined by the candlestick chart.
Understanding the difference in time framesLong-term investment and short-term investment are different, and it is important to not only diversify assets horizontally but also be aware of vertical diversification over time.
Pursue simplicity.Rather than complex theories, it is important to practice simple tactics and gain experience.
Understanding this can save you time and money by avoiding unnecessary studying, events, and seminars.
Please take the time to organize this within yourself.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
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  • 大負けネコ(HYPER) : Hello 😃

    I had a bit of free time during the transaction, so when I looked at Moomoo Securities, you posted “Let's understand the essence of investment. Vol. 2,” so I took a quick look at it all.

    This time, in “long-term investments” and “short-term investments,” do you understand that “buying grounds” ⇒ “support/resistance lines, etc.” are not misled by “theoretical stock prices” etc. that are often described in magazines, etc., to determine “essential stock (= corporate) value,” transactions that match each person's “investment style” and “investment tactics” suitable for each style are necessary?

    Hmm, I definitely wanted “New NISA Investment Beginners 🔰” to read this kind of “advanced investment tactic story.”
    I myself believed the “theoretical stock prices” I saw in the magazines etc. you pointed out due to the “rule of thumb” for over 10 years “investing in Japanese stocks,” and I put up with it for about 3 years, but were there about 5 to 8 “stocks that cut losses”?
    No matter how “undervalued” it is, the actual “price movements in stock prices are not true.”
    I think it's an extremely simple “truth.”

    I have a “long-term perspective,” and first, a “10-year future goal.”
    Thanks to that, “stocks purchased 10 to 8 years ago” are mostly positive.
    But recently? is a “new NISA investment = stocks purchased after January,” and there are 5 to 8 stocks with “failure = unrealized loss △ 0.05 million yen or more,” and in January & February, “you have to buy quickly before stock prices rise ❗️”, so “stocks purchased without properly predicting the future” are bad.
    Technical analysis is a type where “almost nothing has been learned,” so “all rules of practice are rules of thumb.” The moving average also “looks up to the 75-day line,” but “I don't see the 250-day line.”

    Recently, the tactic of “jumping on short-term trends” has been adopted from time to time, and various “experiments” have been tested, such as purchasing “industry stocks that have not been dealt with until now.”
    But as a “result of experiments going too far,” “is the portfolio an ETF? It's becoming “transformed.”
    There is no need to “hold 1 unit = 100 shares” for all stocks.
    Or rather, “we don't have that much capital,” so “future treasure candidates hold 200 shares or more,” but the minimum number of shares to be held is “1 share.”
    If you “skyrocket ❗️” as soon as you buy it at a low price, you “can't buy more” a “brand with a high unit price.”
    Since it is essentially “stingy,” “the basics of stock trading are the same as business,” and I try to thoroughly “buy when it's cheap (= undervalue) and sell when it's high (= uncovered profit).”

    Have “industries, regions, and product types” been made quite “diversified investment, including time”?
    But if “American market” ⇒ “soft landing failure” happens, “exchange rate ⇒ 1 dollar @130円未満の円高 ❗️” will come

  • 大負けネコ(HYPER) : Ah, sorry.
    When I dropped my smartphone, I “sent” it.

    If it becomes “$1 @130円未満の円高ドル安,” it would be really dangerous, and various “countermeasures are being considered.”

    Technical analysis is “helpful.”
    Thank you for your continued support 🙇‍♂️
    Excuse me for the long sentence ❗

  • HandleladySTYouTuber : ○HandleladyStockTrabeYouTuber. Started as an investor in September 2024. Personally, I feel that stock investment is like track and field or swimming competitions. ◎NISA is like a marathon. Levels vary from Boston to citizen marathons. ◎ Investing in US stocks, margin trading, and currency trading is like long jump or high jump. ◎ Domestic stocks are like a 100-meter dash. Easy to understand and anyone can do it. Stock trading is like climbing a mountain. First, choose the mountain you want to climb and aim for the 5th station. Beyond the 6th station is very dangerous. Beginners compete at safe prices below the 5th station, and professionals at prices above the 6th station sell when it goes up and sell immediately when it goes down. Otherwise, you'll slip and fall.

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