The rule of thumb for individuals investing is always, “It went down, but so what?” Individuals don’t have accounting periods When you see a big drop, you tend to think, “I’ve suffered a big loss,” but that’s actually an “unrealized loss,” and the difference between the original price and the current price is just an armchair number. There will be no “realized loss” unless you sell. This is a big difference from professional investors whose investment performance is evaluated quarterly. Dollar cost averaging, which involves continuing to invest the same amount in a financial product whose price fluctuates, allows you to buy more when the price falls. When you purchase apples with a budget of 1,000 yen, you can only buy 10 apples if they cost 100 yen each, but if the same apples drop in price by half the next month, you can buy 20 apples. If the price rises to 500 yen the following month, you will only be able to buy two. Over the three months, he invested 3,000 yen in capital but only obtained 32 apples, at a unit price of just under 94 yen. The purchasing cost has been reduced compared to 100 yen per piece. It’s simple arithmetic, but regular investment is a device that automatically provides this “cost reduction effect.” In other words, downturns become valuable nutrients. Even if you start at the peak of the bubble, you can still make a profit if you make an investment. Let’s look at the price movements of the Nikkei average. Let’s assume that you have continued to invest 1.2 million yen per year, within the NISA investment limit, every year since 1989, when the bubble peaked (38,915 yen). The principal over 36 years will balloon to 43.2 million yen. If you had invested a lump sum at the high end of the market, you would naturally incur a loss of just under 10% if the price fell below 36,000 yen. However, when it comes to installment investment, it is the increased purchases made during a downturn that make the difference. Even at the level after the sharp drop on the 2nd, it would still have a large unrealized gain of more than 50 million yen. If you understand this mechanism, you will be able to see the occasional turbulent market conditions as valuable purchasing opportunities. If you sell it now you will miss that opportunity. However, it can be scary to start investing in the middle of a volatile market. You might think, “I’ll wait until I calm down a bit.” But that doesn’t mean much. After all, if you think of it as long-term investment with monthly savings, the impact is only 1/120 over 10 years and 1/240 over 20 years. The “opening price” doesn’t really matter when it comes to deciding at what price to start investing. For details, see source 2024/8/4.
Hold on to it for more than ten years. I’m sorry, but there’s a chance that individual companies will end up like garbage like Japanese electronics manufacturers and the Big 3.
>>24 That’s right, buying at the high price and holding onto it for 30 years is stupid, you should sell off what you bought at the high price and buy when it hits rock bottom.
Individuals also have accounting periods, such as retirement, children’s further education, marriage, and home purchases. The Nikkei will remain a stockbroker’s newspaper no matter how much time passes.
>>36 Unlike gambling, when you invest, all the numbers are recorded, so you can clearly see if your money has increased. It also has tax implications. Do you understand?
0037Anonymous donburako rolling around.Aug. 4, 2024 (Sun) 13:04:18.78ID:KBHCRsSv0
If you have physical assets in a NISA, you won’t die even if you have unrealized losses. However, it’s unclear whether you’ll see any profits by the time you die. Old people who were persuaded to start investing for their retirement are total victims of scammers.
That’s because it’s a savings plan that allows you to buy more when it’s cheap, right? People who bought at a high price will be in trouble for a while It’s better to cut your losses early.
>>42 When it comes to margin trading, it’s better to cut losses early. It’s a different story with long-term spot investments. There’s nothing to gain from cutting losses every time the market crashes.
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