Diversified Investment Methods for Stock Trading Beginners 【Japan Stock Trade Secret】

Title:Diversified investing methods for stock trading beginners【Japan Stock Trading Essentials】

Source: Amigo Investment School

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Diversifying positions by time and number of shares is an important part of risk management. Below is a written example of diversification of investments:

In investing, it is very important to diversify positions by time and share count to minimize risk.

For example, suppose an investor is considering purchasing 10,000 shares worth of technology-related stocks.

First, the investor selects 10 different technology-related stocks and invests 1,000 shares in each.

However, at this time, they decide to purchase 100 shares at a time, every month, until they reach 1,000 shares for each stock, spreading the purchases over 10 intervals.

By doing so, if the stock prices drop significantly, they can buy at a lower price.

This diversifies the risk across individual stock price movements and avoids dependence on a single stock.

Furthermore, they consider diversification along the time axis as well.

They plan to invest 100 shares each month in the technology stocks chosen for diversification, meaning they will diversify the portfolio rather than increasing only one name.

In this way, they can flexibly respond to market fluctuations and minimize risk through time and share count diversification.

Diversified investing is a key to long-term investment success by not relying on a single risk.

Investors should carefully consider stock selection and capital allocation, and by diversifying by time and share count, build an effective strategy toward retirement and future financial stability.