“State of emergency”
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Investment assumption series entries:
1. I’ve considered potential investment destinations in the event of a Chinese attack on Taiwan
2. I tried to envision investment opportunities in the event of hyperinflation in Japan
3. I tried to consider investment options in the event of a global pandemic
4. Considering Investment Opportunities in the Event of a Third World War
5. Anticipating Investment Opportunities in the Event of a Major Earthquake in Japan
6. Considering investment destinations in the event of a global financial crisis
7. Considering Investment Destinations in the Event of a Global Depression
About investment assumption series
Whether it’s a war where many lives are mercilessly taken or a major disaster, from an investment perspective, it’s just one event.
Then, we measure the investment methods and timing that seem to maximize profits from that event.
To the general public, this may seem like a cold and inhumane approach and behavior, and in some ways, it is indeed so.
For example, upon hearing news of Russia’s invasion of Ukraine, one might first check the products Ukraine exports or rush to check the situation with Russia’s currency.
Although it pains me to see the tragic situation on the ground, that is separate from investment.
It’s inevitable to be seen as a cold-hearted miser.
The rigor of investment activities
However, in engaging in investment activities, where calmness or rather a “normal state of mind” is necessary, one has to get used to such perspectives, thoughts, and actions.
There’s a term “occupational hazard,” and for investors, it’s precisely this kind of reaction and mindset.
Though it might sound like an excuse, it’s true that without grabbing opportunities where one can, it’s impossible to continue in investment activities.
…Here, when I talk about investment activities, I mean investing as a full-time job, not including casual index investing.
I do some index investing myself, and that’s certainly a respectable form of investment, but it doesn’t apply when one is aiming for annual returns of several tens of percent, like a typical investor.
The importance of anticipating investment
When the market drastically changes, whether or not to trade in the so-called “fiery market” varies among investors. Everyone’s approach is quite different.
In my case, I avoid day trading unless it’s an extraordinary situation.
For day trading, it’s fine to wait at points verified during normal times.
For long-term investments, one cannot always just watch; there are situations where taking a strong position for portfolio defense is necessary.
Once you have a portfolio, whether it’s stocks or bonds, you’re already participating in the market.
In such a state, if a ○○ Shock occurs, one must think about how to respond. This “Investment Assumption” series is an attempt to consider such scenarios, even if just briefly.
The fortune of being able to invest during ○○ shocks
Being able to invest means not being in a country or area affected by a disaster or conflict, and that’s a situation to be grateful for.
The important thing is to ensure that one is not physically or mentally caught up in such disasters or conflicts.
For example, during the Great East Japan Earthquake, I was living in Tokyo and working as a salaryman. I was shocked when the building I was working in swayed centrifugally on the day of the earthquake, and like many others working in Tokyo, I became a stranded commuter.
After that, I stayed in Tokyo, scared of being exposed to radiation from the nuclear meltdown.
At that time, I hadn’t started investing, but if I had, I wouldn’t have been in the right frame of mind.
Maintaining a normal state of mind for investment means being physically distant from such disasters or conflicts and mentally able to take a step back and view the event objectively.
If the situation is something I’ve already anticipated or similar, it’s easier to maintain a normal state of mind.
So, I plan to continue adding to the series whenever I think of situations that might drastically change the market.
