[Summary]
The seesaw rule is a metaphor that shows that when one side goes up, the other side goes down.
What's more likely to fail with the see-saw rule is not the lack of knowledge itself, but the fact that you end up justifying your hasty decisions afterwards.
In actual investment, the starting point is to look at the relationship between interest rates and stock prices, the appreciation of the yen and export stocks, etc. However, you must be careful that if you assume that it will always move in the opposite direction, you are vulnerable to exceptions.
In this article, we will organize the seesaw rule not as "knowledge" but as a procedure to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
First, divide by the see-saw rule.
When looking at the see-saw rule, first separate what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. The seesaw rule is not the only material used to make decisions. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Situations where you are likely to fail using the seesaw rule
If you look at the see-saw rule as a failure pattern, first make a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
If you check the following points, things will be much more organized.
| Axis to check | What to see with the seesaw rule |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
The problem with the seesaw rule is not only when you lack knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Don't decide to buy or sell the moment you see the see-saw rule.
- Do not mix your own holding period with the time axis that fits the see-saw rule.
- Don't increase your position to recoup your losses
- Don't make a decision just based on SNS or rankings.
The important thing here is not to settle on a single correct answer based solely on the see-saw rule. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before using the see-saw rule as a basis for making an actual decision, check at least these five things.
- Can you explain in one sentence the purpose of looking at the seesaw rule?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking the seesaw rule is not to act faster, but to reduce unnecessary errors in judgment.
Summary
The seesaw rule is a material for organizing investment decisions. Even if you read it as a failure pattern, treating it as a standalone buy/sell signal will lead to poor judgment.
The points to keep in mind are as follows.
- Decide first the purpose of looking at the seesaw rule
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. It is realistic to treat the seesaw rule as a tool to pause before buying or selling, rather than a word that forces you to make a hasty decision.