19: Is long-term investing just about waiting?

Last time,

“What does it mean to diversify?“

we thought about that.

By not limiting your investments to one place, but rather diversifying across countries, companies, and time, you ensure that your entire livelihood isn’t shaken by a single event.

So, how long should you hold those assets?

This time, I would like to think about long-term investing.

Long-term investing is not just about waiting.

If you hold for the long term, it will definitely increase in value.

Unfortunately, there is no such guarantee.

Stock prices can fall, and sometimes they don’t grow as much as you expected.

Along the way,

“Maybe I was wrong after all”

there are times when you might think that.

Even so, long-term investing has one major significance.

Every time there is a short-term price movement,

“Should I sell?” “Should I buy back in?” “Should I get out now while I can?”

you don’t have to keep making those decisions over and over, and you don’t have to let your own emotions go up and down with them.

Instead, you gain the time for corporate growth and the reinvestment of profits to accumulate.

Compound interest creates room to work.

For me, long-term investing is that kind of choice.

There is also a budget for the time available for investing.

As a salaryman, the time I can spend on investing is limited.

I have my main job, time with my family, hobbies, and things I want to study.

If I had the time, I could research individual companies in more detail.

However,

having time and wanting to use that time for investing are two different things.

In my case, rather than spending a lot of time every day to maximize investment returns, I want to use my time for my main job, hobbies, and skill development.

Therefore,

Without making big mistakes.
Without ruining my life.
In a way that lets me sleep at night.
And being able to continue for a long time.

Creating such a structure suits me better.

I hold core assets for the long term.

I check the overall situation about once or twice a month.

I do not follow daily price movements more than necessary.

This level is just right for me now.

Long-term investing does not mean being indifferent to the economy.

However, just because I hold for the long term does not mean I distance myself from economic or political news.

What is happening in the society I live in?

How is the economy moving?

What are companies and people struggling with, and what are they expecting?

I want to stay informed about that much, keeping a healthy distance.

In my case, every morning, I watch TV Tokyo’s Morning Satellite.

I can quickly check economic and political news, and it’s also somehow enjoyable to have the young announcers, who are about the same age as my daughter or son, present it each day.

It has become a small daily morning habit.

On weekdays, I don’t have time to read the newspaper thoroughly.

Instead, I buy the Nikkei newspaper only on Saturdays.

Since online articles flow by one after another, it’s hard to grasp the nuances of their importance.

In that respect, with newspapers, from the headlines and layout,

“this was important this week”

you can see the sense of temperature.

If it’s once a week, I can read without being rushed.

On Saturdays, NIKKEI Plus 1 is also included.

Since I can read everything from lifestyle stories to economics, it’s quite cost-effective for me.

Watching the news and trading immediately are different things

However, just because I watch the news doesn’t mean I trade within that same day.

I watch the news not to predict tomorrow’s stock prices, but

to know the body temperature of the society I live in

.

Interest rates, exchange rates, new technologies, political movements.

It’s interesting to know about such changes.

But, just with that,

“I’ll sell this stock tomorrow.”
“I’ll jump on this trend right now.”

I don’t decide things like that.

I don’t move my core assets based on short-term news.

On the other hand, in my case, I allocate about 10-20% of my investment assets to a satellite portion consisting of individual stocks or active funds focused on specific themes.

In that portion, I sometimes buy and sell over the short to medium term.

Emergency funds or core retirement assets are not what I’m betting; it’s a portion meant for enjoying the process, including price fluctuations, almost like

“adult gambling”

(laughs).

I don’t follow economic and political news just for investment decisions.

Knowing how the world is moving is interesting to me in itself.

Review when your life changes, not when stock prices do

I don’t believe long-term investing means holding the same things no matter what happens.

There are times when you should review your portfolio.

But in my case, the trigger isn’t when stock prices drop a little.

Getting married. Having children. Buying a house. Changing how you work. Seeing your retirement date approach.

It’s when the premises of your life or your family’s life change like that.

You shouldn’t keep money you plan to use soon in the same place as money you intend to hold until retirement.

If you put money you need within a few years into stocks, you might be forced to sell even if the price has dropped when you need it.

That’s why, before investing in long-term assets, you should set aside emergency funds and money you’ll need in the near future.

Long-term investing might not be about believing in the future and waiting, but rather about separating your money now so that your future self doesn’t have to panic.

Long-term investing for me

For me, long-term investing is also a way to avoid spending too much of my life’s time on investing.

I let my core assets work slowly.

In the meantime, I focus on my main job.

I enjoy my hobbies.

I learn new things.

I spend time with my family.

And sometimes, I find it interesting to see how the world is moving.

Don’t make investing the main character of your life.

But to increase my future options a little, I also let my investments work.

For me right now, that level of distance feels the most natural.

Next article

Scheduled release date: around 10/17
Is dollar-cost averaging just a way to buy on cheap days?

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