◆Why is it necessary to diversify investments?
In this issue, we would like to talk about the key points and specific methods of investment diversification that you must keep in mind when building your assets.
You have probably heard the term “diversified investment” at some point.
Diversified investment, as the name implies, means to divide your investments among several different investments. But why would you do that?
It is true that the size of your investment matters, so the more money you invest at one time, the more money you will get.
However, only a limited number of ordinary investors can do that. The reason is that if you fail, you will lose all your money.
Mr. CIS, a Japanese individual investor who is said to have enough assets to move the Nikkei 225 by himself, says that his investment style is based on “putting a lot of money into stocks that make big moves. In other words, the way he built up his 23 billion yen fortune in a short period of time was like a gamble: “I put most of my assets in highly volatile instruments.
He was able to do this largely because of his previous life experiences and his gambling nature. In any case, it is still a method that can only be done by those who have large amounts of money.
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◆High-return investments are not for the average person.
The basic style of Mr. CIS is the lump-sum investment method. As mentioned earlier, this is a method for those who have a large amount of money on hand.
On the other hand, anyone can engage in the diversified investment method. The purpose of diversification is to reduce risk.
There is no such thing as “no risk, absolutely safe,” and since there is no such thing as a 100% guaranteed return, it is extremely risky to concentrate on a single investment.
Even for professionals, lump-sum investment methods are difficult, so if anyone reading this is interested, please contact FAN for more information.
By the way, when we talk about risk, people generally have the image that risk = danger. Risk in asset management is not danger, but rather “a large swing in return and price fluctuation. Incidentally, return is the result obtained by asset management.
Sometimes a high-risk product will give you a lot of profit, and sometimes you will lose all of your principal. A high-risk product has a high degree of uncertainty.
On the other hand, a low-risk product is not expected to make a large return, but instead is less likely to fall in value.
People tend to think of “something with a high return,” but we must not forget that there is also a commensurate amount of risk hidden in the product.