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Are Japanese banknotes safe? Is investment dangerous? How is the truth!

“Investment is dangerous because it’s gambling. Money is limited to bank deposits.” I often hear that, but what about the truth?

What is the basis for determining “danger” and “safety”?

People who “deposit” in banks and post offices and who have never “invested” cannot understand.

Isn’t it just a rumor that someone has lost money on an “investment”?

You know that the Bank of Japan is investing in ETFs and pensions in stocks, but is it dangerous for individuals?

Let’s study finance! “Investment” is not dangerous, but those who do not study “finance” are dangerous.

What is “money”?

Looking back on history, the currency of any country is the “coin.”

It was a metal such as “gold” and “silver” per gram, but it is inconvenient for large-value transactions, so it is a “banknote”. Tickets (credits) issued by central banks have come to be used as substitutes.

If a country goes bankrupt economically, “banknotes” become waste paper. (There is an example from Greece)

Japan, which has a debt of 1100 trillion yen, will not go bankrupt, but I am worried about the value of “banknotes”.

Aluminum ingot 1.2Kg is sold at Rakuten Ichiba for 4,170 yen. 1g is about 3.5 yen. In other words, the metal value of a 1-yen coin is more than tripled.

“Since a 1-yen coin is aluminum, it has the value of 1 yen guaranteed by the government and the value of aluminum metal.”

When I told this story to an investor, I was laughed at.

“A 1-yen coin can cost 10 million yen to 10 tons. Where should I put it?”

“Then there is a commodity to invest in metal.” “If you want to have it in kind, the gold ingot is not bulky.”

Equities are not the only investment. You can invest in precious metals and real estate, and you can also invest in government bonds around the world.

Safe investment

Investment is basically “buy cheap, sell high” and receive “dividends”.

However, there are “safe investments” and “dangerous investments” depending on the product and investment period you choose.

The Dow Jones Industrial Average in the United States has exceeded 30 times in 40 years, and when converted to an annual average, it has risen by 9%.

The past 40 years of the Nikkei average have been in the period from the high growth era to the bubble era, so the fluctuations in the first half are remarkable, but after the Great East Japan Earthquake, the movement is almost the same as the NY Dow in the United States.

Stock chart

As you can see, from 40 years ago, if you save 10,000 yen each month like a time deposit, you can see that you can make assets that are far from funds for old age.
* If the annual increase of 9% is calculated by compound interest, it will be tens of millions of yen.

It is safe to invest in such an index. ETFs (Exchange Traded Funds) are recommended because they have lower fees than investment trusts.
Besides that, it would be good if we could diversify “gold, silver, platinum”, “US and Japanese bonds” and ETFs around the world for long-term investment.

Dangerous investment

Traders such as securities companies and trust banks are investment professionals.

Their job is to make a profit by using various methods of “money” collected from companies and individuals.

It is natural that if you imitate them without studying investment, you will be defeated. You may lose all your property.

This is why 90% of individual investors fail to invest in equities.

When I first invest, it goes down when I buy it and goes up when I sell it. I have had the experience of feeling like someone is watching my actions.

For such short-term investment (trade), understanding “fundamental analysis” and “technical analysis” and understanding the daily economic situation are the minimum requirements.

Investing on a whim is dangerous.

* Reference: It seems that more than half of the funds operated by investment institutions (professional traders) were in the red in FY2020.

NY Dow, S & P, Nikkei average cannot be lowered

The stock indexes that represent the country, such as the NY Dow, S & P, and Nikkei 225, do not fall because the companies that are incorporated are constantly being scrutinized and replaced.

Japan’s “Nikkei 225” is regularly rearranged by 225 companies to make it a group of excellent companies, and the Bank of Japan is buying ETFs (Nikkei 225), so stock prices continue to grow for now I expect it.

Since we invest in stocks such as public funds, if the Nikkei average falls, our finances will deteriorate.

This is the answer to “Why does the stock price rise when our lives are getting harder due to the influence of the new Corona?”

Investment is self-responsibility

Lehman shocks, coronas, disasters and what will happen in the future are unpredictable. Both investment and deposits change according to the movements of the world.

This may be the best at the moment, but it may be different tomorrow, it’s unpredictable because I’m not a prophet.

Make an asset that you can research and understand by yourself, without casually adjusting to the surroundings.

“Investment is self-responsibility”