We've decided not to do high-dividend stocks (so far)

I want CharinCharin's pocket money

When you're studying investing, that kind of feeling comes up, doesn't it?

Understood.

But I decided not to do it.

The reason is simply that it is less profitable than investing in indices.

I know that investing in high-dividend stocks is “less profitable than an index,” but they are recommended for reasons such as “for mental stability.”

I certainly understand how you feel.

I myself have never experienced a “crash,” and I can't say 100% that I won't sell in a hurry when that time comes.

However, I think it will probably be fine.

When it comes to why, one is “because I'm investing for a long time,” and conversely, “because I haven't traded for a short period of time.”

You should recognize that “there were waves that went up and down, and now they're going down, aren't they?”

When they go down, they change their number of words rather a lot.

The other is “because we are diversifying our investments so that they don't fall too much.”

As is the case with regional diversification, asset distribution is also being carried out.

There is an expectation that bonds will ease even if stocks fall sharply.

Recently, there are stories that the positive correlation between stocks and bonds has been increasing, and there are also stories where the extreme increase in US interest rates in the past few years has higher volatility than stocks and the risk is high.

Nonetheless, I think the risk is lower than holding only stock assets.

Also, “having a certain amount of necessary cash” is also important.

This is what is called a life defense fund.

It is very important that there is a solution that “you can withdraw your deposit and use it” for “if the timing of use is fixed, like education funds, what should you do if it crashes at the timing you want to use it.”

Since the amount of money is important in order to increase assets through investment, it is more reasonable in terms of asset formation to reduce cash as much as possible and turn it into investment.

However, all that is necessary is to “plan the necessary amount when cash is needed,” so I don't want to determine losses by saying “but because I need cash...” during a major crash.

If you don't have enough cash, you have no choice but to do that, but if you have cash, you can plan from there.

So, I think it's a good idea to think about cash in terms of amounts rather than ratios.

Specifically, I feel that management that “makes sure that the balance does not fall below the standard amount after card withdrawals, rent payments, etc. have been completed” is good.

The standard amount is different for each person, including income and psychological aspects, and it may also fluctuate from year to year.

Personally, I'm currently using “1 million yen” as the standard amount.

Also, I think that the amount accumulated in small business mutual aid is like a “quasi-savings account,” so as that total amount increases, the sense of security increases quite a bit.

In summary, “balance is achieved by setting up asset allocations that are resistant to crashes on the premise of long-term investment and holding cash to some extent.”

It's derived quite a bit from “not investing in high-dividend stocks,” but this is the reason for not doing it.