Before I knew it, 70% of my mutual funds were S&P 500. I'm revealing everything inside them now.

In episode 6, I wrote that the foundation of my asset building is mutual funds.

I have continued my monthly investments since then.

So, what exactly do I hold now, and how much? When I looked at the numbers again, I realized it was more skewed than I had even thought.

This time, I would like to reveal the contents exactly as they are.

66.3% of my assets are in mutual funds

Currently, 66.3% of my assets are in mutual funds.

When I revealed my portfolio in episode 9, it was about 65%. It has been increasing little by little since then.

Even though I write so much about individual stocks, mutual funds are at the center of my asset building. This time, I would like to look at the contents along with the numbers.

I hold 7 funds. But this is what they actually contain

Currently, I hold 7 mutual funds.

• eMAXIS Slim US Equity (S&P 500): 66.23%

• eMAXIS Slim All Country World Equity (All Country): 12.35%

• eMAXIS Slim All Country World Equity (Excluding Japan): 8.11%

• iFreeNEXT NASDAQ 100 Index: 6.52%

• Rakuten Plus S&P 500 Index Fund: 5.46%

• Rakuten Plus SOX Index Fund: Less than 1%

• iFreeNEXT FANG+ Index: Less than 1%

When lined up like this, it might look like I am diversified across various mutual funds.

However, it is quite skewed. Just the two funds linked to the S&P 500 account for about 70% of all my mutual funds.

However, I do not consider this skew itself to be a problem.

This is what happened after six years of systematic investing.

My mutual fund holdings are not a neatly designed portfolio.

I bought the S&P 500 first. After that, I also systematically invested in All Country and All Country World Equity (excluding Japan). I also bought NASDAQ 100. I hold a little bit of SOX and FANG+ as well. And I still hold the mutual funds I stopped investing in along the way without selling them.

The result is my current allocation.

I am not currently investing in All Country. What I am currently investing in is the Rakuten Plus S&P 500 Index Fund. It’s not that I switched because the contents changed significantly, but because under current conditions, investing in this fund at Rakuten Securities earns me about 16,000 points per year. If I’m going to invest in the S&P 500 anyway, that’s what I choose right now. That is the only reason.

Having seven funds does not mean I am diversified.

Having laid out the numbers this far, there is one thing I asked myself.

I have seven funds. But can I really say that my investments are widely diversified?

Looking at it again, it is quite biased in terms of region.

The S&P 500 series alone accounts for about 70%. Furthermore, NASDAQ 100 and FANG+ have a high weighting toward large U.S. tech companies, and SOX is specialized in semiconductors. All Country and All Country World Equity (excluding Japan) also contain many U.S. stocks.

While there are seven funds in terms of product count, when viewed as investment targets, it is quite U.S.-leaning.

This was the newest discovery I made after calculating the numbers again this time.

But I have no intention of fixing that.

If it’s biased, you should increase your All Country holdings.

I think some people might think that. But I have no intention of doing so right now.

There are several reasons for this.

I started with the S&P 500 at the center from the beginning. As a result of long-term systematic investing, the proportion has grown. My belief that the U.S. should be the center has not changed even now. I have currently stopped investing in All Country. And I do not buy or sell just to tidy up the ratios.

I am currently investing in the Rakuten Plus S&P 500, and under current conditions, there is also the practical benefit of about 16,000 points per year for me.

In other words, this is not the result of designing an ideal portfolio. My six-year investment history has become my portfolio as it is. That is the current reality.

Mutual funds are a bit boring

Even though they make up 66.3% of my assets, there are few articles about mutual funds in this note. The reason is simple: not much happens with them.

I just make monthly contributions. There are no earnings reports. No dividend increases. Almost no decisions to buy or sell. That’s why it’s hard to write articles about them.

On the other hand, with individual stocks, something happens every time. Buying. Selling. Receiving dividends. Dividend increases. Dividend cuts. Earnings reports. Failing. Changing my mind.

I find this contrast a bit interesting myself.

If I were 32 again, I would recommend mutual funds exclusively.

If I could meet my 32-year-old self who had just started investing and was told, ‘You can only buy either mutual funds or individual stocks.’

I wouldn’t hesitate. I would choose mutual funds exclusively.

This isn’t to say that mutual funds are superior. It’s just that because I’ve done individual stocks this far, I would have my beginner self choose mutual funds.

Because I trade individual stocks, my emotions get involved. If it goes up, I think, ‘I should have bought more.’ If it goes down, I think, ‘I bought too early.’ If it goes up after I sell, I think, ‘I shouldn’t have sold.’ There’s no end to what I can think about.

Because I can trade on my own, I end up thinking I could make more profit. But at the very least, I don’t have the confidence to consistently outperform the market average. In that case, I’ll leave it to the index.

At the very least, I think that way reduces unnecessary trading and makes it harder to be swayed by emotions. Now that I’ve been doing both individual stocks and mutual funds for six years, that’s what I think.

Even so, I think I will continue to buy individual stocks in the future. That’s because I’m not investing based solely on rationality.

For me, mutual funds are a ‘superior alternative to savings’.

Before I started investing, my mindset was, ‘I’ll save what’s left over.’ It’s different now. When I get my paycheck, I contribute to mutual funds first. Then I live on the remaining money.

In my view, mutual funds have become something like a ‘superior alternative to savings’.

Of course, they aren’t a true superior alternative to savings. Unlike bank deposits, there is no principal guarantee. There’s a possibility they could drop 20% tomorrow. I don’t think you should put money you need into mutual funds either.

Even so, rather than just leaving money I don’t plan to use for 20 or 30 years in cash, I want to ride the growth of companies. To do that, I don’t need to pick each company myself.

So, I contribute every month. Whether it goes up or down, I keep going. And when I’m around 60, I’ll start to shift to the side of using it.

Finally

This time, when I looked at the contents of my mutual funds in numbers again, I was a little surprised myself.

Although I hold 7 funds, about 70% are just S&P 500-related. Looking at my investments, they are quite heavily skewed toward the U.S.

However, seeing that didn’t make me think, ‘I have to fix this.’

This is the result of what I have thought about and accumulated over the past 6 years. I started with the S&P 500 at age 32. Along the way, I bought All Country. I also bought NASDAQ. I kept the mutual funds I stopped contributing to without selling them. Now, I am accumulating Rakuten S&P 500. That accumulation is what makes up the 7 funds I have today.

My 6-year investment history has become my portfolio just as it is.

I believe it is more important to understand what you are investing in and why it is in its current form than to create a perfect portfolio.

For me, mutual funds are still like a ‘superior version of savings.’

Even though I think this much about individual stocks, I have 66.3% of my assets in mutual funds.

Moreover, the contents are quite heavily skewed toward the U.S.

But that is who I am now. It is not the result of designing it according to an ideal, but the result of continuing for 6 years that it has ended up like this.

What do your mutual funds look like inside? If you calculate the numbers again, you might make discoveries that are different from what you expected.