A column published on Toyo Keizai ONLINELearn from the crash

Good morning, this is Matsushita.

Every Sunday, we deliver a column on investment-related

themes.

Today's theme is,

"Learning from Crashes"

Crashes occur several times a year without fail.

There are clear reasons for that.

Sometimes they swell into a major crash.

From crashes, you can learn a great deal,

and you can profit from crashes.

However, many investors

only fear crashes,

and learn nothing.

An investor is someone who, no matter what happens,

takes on risk and aims for profit.

Learn from crashes and increase your profits.

【Column】 Makoto Matsushita's Investment Exploration

Episode 211 "Learning from Crashes"

In the market, crashes occur several times a year. Crashes arise from sharp sadness or despair among market participants and appear at a certain frequency as the flip side of hope and optimism.

Every few years, a crash swells into a major crash. When a crash occurs in the market,

we can learn many things.

The most important element learned from crashes is the importance of money management. Investors who lack money management

will suffer devastating damage to their capital when a crash hits, making it painfully evident the importance of money management. If possible,

we would like to learn the importance of money management before encountering crashes.

Some crashes create buying opportunities. This is because market participants are in a state of panic at the end of a downtrend known as a overshoot, and when a crash hits there, prices may never drop again. In this case, the crash becomes a time to calmly buy rather than to sell.

The intense down move in the market is a crash, and from that intense move, investors can learn many things. When the market moves violently,

risk is high, and while losses are easy, profits can also be made. The market is always full of risk, and crashes repeat many times. By reviewing past crashes, we can prevent losses

and make profits. Do not fear crashes;

let us learn from crashes.