Rチェet Theory Sees Three Perspectives

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Rチェet theory is a concept called “Rチェet effect” in Japanese.

It refers to a phenomenon that does not return easily, such as spend, price,金, expectation, and organizational costs that have been raised once.

If you are investing, the following three points are:

• It is difficult to lower the cost of living
• Corporate fixed costs are easy to understand
• The risk tolerance of the investor is highly appreciated by the rising market

When the market is good, I want to check whether the投資enditure or investment amount has been increased by the "assumption that the profit continues now".

What is Rチェet Theory?

Rチェet is a mechanism of gear that can only be turned in one direction.

In economics, it is used as a 現象omena that becomes difficult to return to the original level once a certain state rises.

For example:

• Inc ing income increases living costs
• The cost of living is not lower even if the income decreases
• When the business objectives rise, the following year is likely to be high
• Government政府enditure built during crisis is easy to rest
• Wages and prices are high resistance when lowering from rising

In short, the rチェet effect is the ability to move on, but it is hard to return down.

In the investment, if you look at this "back" sweet, it will be difficult to move when the market is bad.

Perspective 1: Fixed costs of households are difficult to lower

The most familiar is household.

In the year when the year and gained, rent, car, eating out, sub-sk, educational expenses, etc. are increased at once, the level of living will be naturally dropped to that amount.

The problem is when the income or investment profit has decreased after that.

In order to reduce the enditure, you need to change the contract, look at your home, discuss with your family, and change your lifestyle. Even if you can cut the number, you can not cut it immediately.

This is a scary place of rチェet effect.

The profit gained by investment ctuates. Living expenses will be fixed unexpectedly.

If you see this difference, you may be able to sell "a good asset" when the market is bad.

Perspective 2:企業のumulate corporate fixed costs

There is a rチェet effect for companies.

In terms of favor, it is easier to increase personnel, equipment, advertising costs, stores, and system investments. It looks like a growth investment while sales grow.

However, when the sales are dull, the fixed costs will be heavy.

When you look at the financial results by investing in stock, you may not only increase sales, but also how much fixed costs are.

In particular, economically sensitive strains and growth strains, the cost of調umulating in favorable periods may be lowered in the recession period.

Perspective 3: Inc ing risk

The rチェet effect will occur to investors themselves.

When the rising market continues, the risk that was scared at first appears normally.

• Increase your investment
• Use leverage
• In investment
• Inc ing living expenses on the basis of profit
• Imagine the loss amount at the time of drop

I feel that my decision was successful while the profit was made.

However, it can only help you in the market environment. If you make a mistake here, you will be delayed in determining your risk.

The rチェet effect for investors is not just living expenses.

The risk tolerance itself may rise according to the favorable market.

Benefits

Rチェet effect is not only a bad story.

There is a possibility that good habits and mechanisms can be piled up.

For example:

• Monthly investment becomes a habit
• The habit of lighting a household account
• Improving business
• 政府 government and social safety measures
• Investment rules are refined with experience

The structure that we have done is the foundation for the next growth. This is a rチェet effect.

The problem is that the same force works in the bad direction.

High組織endなres, excessive goals, excess risk, and unrecoverable organizational costs. These are not noticeable when the spect is good, but it will be overlapping at a time of recession.

How to invest

In practice, it is easy to understand if you use the rチェet effect as "brakes at good condition".

When the profit is increased, check the following three.

• Do you have too much money to invest?
• Is it a固定enditure that can increase as ctuation expenses rather than fixed costs?
• Is the risk feeling at good condition not standardized at normal time?

For example, it is easier to adjust the amount of time spent on travel, temporary shopping, etc.

The same investment amount.

When you increase the amount of 玉ity or credit transaction on the rise market, you need to calculate how much loss will occur at the time of drop.

It is more useful for "returnable design" than "increase decision".

Common failures

Failures that are easy to occur with the rチェet effect are:

As a beginner, it is often thought that you can get more on the rise market.

However, the risk of increasing when the market is good is difficult to return suddenly because the market is bad.

• Rチェet theory is a way to see the phenomenon that is difficult to lower once
• In households, living expenses, fixed costs for companies, and risk sense for investors
• No more fixed costs and risks than in good condition
• In investment, it is important to design that can be continued at bad times
• Check whether to return before increasing

If you know the rチェet effect, it will return a little calm when the tone is good.

It is more現実 to keep it in a way that you can continue with a bad market rather than adapting to the best market.

*This article is a general explanation for investment education. Please make investment decisions according to your risk tolerance.

出典

• Investopedia「Understanding the Ratchet Effect in Economics: Examples and Implications」