Golden rule 1: Make long-term investments a prerequisite.
Conclusion: Investing is about time.
Reason:
- Price fluctuations are large in the short term
- Growth tends to converge in the long term
Example:
- The stock market goes up and down in the short term, but tends to grow in the long term.
Summary: Consider ``10 years or more'' as a guideline.
Golden rule 2: Reduce risk by diversifying your investments
Bottom line: Don't focus on one thing.
One word explanation: Diversified investment = Investing in multiple assets
Details:
- Separate stocks, bonds, regions, etc.
- Even if one decreases, the overall impact is suppressed
Mini example:
| No dispersion | With dispersion |
|---|---|
| Only one company | invest all over the world |
| big risk | medium risk |
Summary: The basic strategy is to “hold it widely.”
Golden rule 3: Choose low-cost products
Conclusion: Fees are a definite negative.
Reason:
- costs reduce returns
- The longer the difference, the wider the difference becomes.
Example:
- 1% difference per year → big difference in 20 years
Summary: Select “products with low trust fees.”
Rule #4: Don't buy or sell based on emotion
Conclusion: Impatience and greed are your biggest enemies.
Common mistakes:
- Sell when the price declines (loss fixed)
- Jump on the rise (capture the high price)
Measures:
- decide the rules
- Utilize automatic savings
Summary: Eliminate emotions through “systematization.”
Golden rule 5: Invest with surplus funds
Conclusion: Don't use your living expenses.
Reason:
- Unable to withstand price fluctuations
- It is easy to sell mid-way due to anxiety
Guideline:
- Secure life defense funds (3 to 6 months worth)
Summary: Use money you can't live without.
Summary
- Make time your ally with long-term investing
- Reduce risk with diversification
- Increase efficiency at lower cost
- Operate rules without emotion
- Continue with surplus funds
=> Action steps:
- Check monthly surplus funds
- Choose a decentralized investment trust
- Set up savings and leave it alone