For Those Who Can't Keep Up with Accumulation Investing: A Talk for When You Get Bored of Passive Investing
I’m FP Koya, and after a lot of stop-loss selling in October, the realized gains from JX Metals at the beginning of the year have flown away. At times like this, I thought, ‘I’ll rely on the gods! To the shrine!’ but then I realized that October is Kannazuki (the month without gods). It seems I’ve really piled up the losses.
Speaking of piling up, there is ‘accumulation investing,’ but some people quit this halfway through. ‘Accumulation investing is easy because you just leave it alone!’ is what they say, but while you are leaving it alone, you are essentially ‘waiting.’ This act of waiting is surprisingly difficult for human emotions to handle.
In this article, I will talk about why people stop accumulation investing, the reasons behind it, and how to cope when you feel like giving up.
The ‘Three Walls’ of why accumulation investing doesn’t last, according to FP Koya
1. Succumbing to fear during a Lehman Shock-level market crash.
In peaceful times, you might think, ‘Even if the market drops, I’m buying cheap through dollar-cost averaging, heh heh,’ but when a major crash like the Lehman Shock actually happens, the situation changes completely.
When the news reports day after day as if the global economy is over, and you see your assets shrinking rapidly every day, you are struck by intense fear and can no longer endure it.
I remember my father canceling his investment trusts at this exact timing, saying every day, ‘There was no way an amateur like me could make money investing. I shouldn’t have done it.’
I’m sure my father isn’t the only one who has sold off and quit as if they’ve had some kind of epiphany.
2. Getting bored because you’re just accumulating.
The correct way to do accumulation investing is ‘to do nothing and just keep accumulating.’ This becomes boring.
The excitement you felt when you first started investing gradually fades. It becomes a daily routine where money is just deducted every month. And then there’s the stagnant period where your assets don’t grow, which everyone who invests experiences. People often cool off and quit around this time.
I also use iDeCo at SBI Securities, but recently I’ve started tinkering with it, thinking, ‘Maybe I should add FANG+ or change my balanced type to an emerging markets one.’ I’m probably starting to get bored.
3. Struggling with the question, ‘Doesn’t my life stay the same even if my assets grow?’
Even if your unrealized gains increase, it doesn’t make your dinner tonight any more luxurious. When you are accumulating by sacrificing things you want to do or buy now for the sake of the future, you will eventually struggle with this question.
‘Even if my unrealized gains are growing, hasn’t my current life stayed the same?’
Future security or current richness? This is a pattern where people lose this internal conflict and break their accumulation plan.
If you can’t endure all this, is it better not to invest?
The fear of a crash, the boredom, and the emptiness of your current life not changing…
It would be a waste to give up by thinking, ‘If I can’t handle this stress, maybe I shouldn’t be investing!’
This is because the reason you are about to give up might not be a lack of willpower, but simply that the investment method you chose doesn’t suit your personality or emotions!
For those of you in that situation, I want you to try “shareholder benefit investing”!
Shareholder benefit investing has wonderful advantages that can compensate for the weaknesses mentioned above!
1. Emotional support during market crashes
Even if stock prices fall, you can feel like “I’ll hold onto it because I get benefits,” and the benefits that arrive will soothe your heart.
2. You won’t get bored because of the fun of choosing stocks
The process of researching which companies’ benefits are attractive or can be used in your daily life is fun and helps maintain your motivation for investing.
3. Your current life becomes directly enriched
Company products, meal vouchers, shopping coupons, and catalog gifts arrive once or twice a year. A key feature is that it’s easy to feel the benefits, such as shopping at a discount or enjoying a little luxury with the gifts you receive!
In this way, shareholder benefit investing is an investment method that allows you to balance “asset formation for the future” and “the experience of enjoying your current life.”
investment method.
If you are feeling bored or conflicted with accumulation investing, why not try allocating a portion of your assets to shareholder benefit investing?