Need for Diversified Investment
Good evening, this is Shimoyama.
Today's newsletter is
A紹介 of YouTube released this week.
In a video released on Tuesday this week
on the theme of
“The profit margin you should aim for in basic trading and the tips to not lose”
Please take a look.
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Profit margin you should aim for in basic trading and the tips to not lose
https://youtu.be/aU69Fq1jsAw
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When many of you invest in stocks
do you set a target amount of profit or a target profit rate
beforehand
and trade?
In the Stock Academy, we teach
the Wave Riding Investment Method “Basic Trading” which
roughly aims for about 20% annually
as a target, you know.
It’s not simply dividing by 12 months
and aiming for a little under 2% profit each month
as a rule.
There are price swings month to month, so
there will be months with good results
and months that don’t perform as well.
What it means is that, when you acclimate over a year,
in basic trading you should aim for about 20%
profit.
If you learn properly,
this is a very realistic figure,
and many of our school students are actually achieving
20% profit.
Now, in basic trading like this,
the most important thing is, precisely…
“money management.”
The part about “tips to not lose” is deeply related, and in the Wave Riding Investment Method, we divide funds into five parts
to proceed with trading.
With that five-part allocation,
the process of adjusting positions
is a steady task, but
the most fundamental part of Wave Riding Investment Method
is actually the most important part.
In this video,
we discuss such important topics
and would like you to take a look.
Now, another video released yesterday on Thursday
tackled the topic of
“The Need for Diversified Investments”
and we’ve sent it out!
Please take a look.
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The Need for Diversified Investments
https://youtu.be/FyqfU_qy-5I
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Among newsletter subscribers
you may have heard the investment maxim “Do not put all eggs in one basket.”
Many of you probably know it.
Putting all eggs in one basket can lead to everything breaking if it drops,
so in stock investing too, the idea is to diversify across various securities
to distribute funds.
This concept of diversification is very important!
For those reading my newsletter,
you may think,
“Wave Riding Investment Method doesn't invest in more than one security.”
Is that what you think?
Yes...
This was a part that drew a lot of criticism when we started the school,
but in Wave Riding Investment Method, the principle is
that we invest in only
“one security.”
However, that does not mean we ignore diversification.
In Wave Riding Investment Method,
instead of dividing funds by industry or security,
we divide funds within a single security
and invest.
What does that mean? For example, if you start with 1,000,000 yen in capital
the conventional diversification would be
buy 200,000-yen stocks in five different issues
and allocate funds accordingly, but
in Wave Riding Investment Method you split the funds into five parts
and hold 200,000-yen positions in one single security in five parts.
Also, since we actually trade with margin,
the leverage is about 3x,
so a 600,000-yen position can be bought or sold in five positions,
and we proceed with trading.
Investing in only one security does not mean we deny diversification altogether.
Furthermore, with only one security, there is only whether it goes up or down,
so you don’t have to think about extra things.
Well, I think it’s faster to watch the video than read the email text,
so please watch the video for more details.
Well then,
Thank you for sticking with me today as well.
Kenzo Shimoyama
＊Disclaimer＊
While we take great care to ensure that the information in this newsletter is accurate and up-to-date,
we cannot take responsibility for any losses arising from the contents.
Please understand.
This completes the translation.