Good evening. This is Yohaku.
It has been about 10 years since I started investing.
During that time, I have continued to hold both mutual funds and individual stocks.
I didn’t start out with a plan to use them in specific ways.
As I experienced ups and downs with individual stocks and steadily accumulated mutual funds, I gradually discovered my own way of balancing them.
In this post, I would like to write about why I still continue to hold both mutual funds and individual stocks, and what I have felt after investing for about 10 years.
1. When I first started investing, my eyes were on individual stocks
When I first started investing, I only looked at individual stocks, wondering, “Which stock will go up?”
I wanted to pick stocks myself and earn large returns.
I had such strong feelings that I would sometimes buy stocks that caught my attention on social media or in the news.
I found individual stocks more interesting than mutual funds, and at the time, I don’t think I considered the different “roles” of mutual funds and individual stocks.
However, I didn’t get the results I wanted.
So, I decided to go back to basics.
I increased the proportion of mutual funds and reduced the amount of money I used for individual stocks.
From there, I started investing again.
2. Mutual funds became the “foundation of my asset formation”
What I feel after continuing with mutual funds is that they are “easy to continue without doing anything.”
I set up automatic monthly contributions.
There is no need to research individual companies, nor is there a need to keep track of daily price movements.
Honestly, at first, I felt it was a bit plain.
Once you set up your automatic investments, there is almost nothing left to do.
There were times when I thought, “This is kind of boring.”
However, as I continued, my way of thinking gradually changed.
By continuing to invest, my assets grew little by little.
Watching those numbers grow gradually became a source of joy.
At the same time, I felt my anxiety about future finances slowly fading away.
A system that allows you to keep going without doing anything was a much greater benefit than I had imagined.
Now, mutual funds have become the foundation of my asset building.
3. Individual stocks take more effort than I thought
On the other hand, buying individual stocks is not the end of the process.
You have to look at financial reports.
You have to research why the company’s performance is growing.
You have to compare it with competitors.
You have to think about why the stock price dropped.
And you have to confirm whether the premises you had when you bought the stock have changed.
On top of that, you have to decide for yourself whether to keep holding or to sell.
After doing this for about 10 years, what I feel is,
that continuing to make decisions after buying is more difficult than finding stocks to buy in the first place
is what I mean.
For example, the company’s performance is growing steadily.
The reasons why I bought them haven’t changed much either.
Even so, when the overall market sentiment is poor and only stock prices keep falling.
At times like that, I thought, “Maybe I should just sell them,” many times.
Even if I know in my head that “the performance is not bad,” it is not easy to make a calm judgment when my own money is actually decreasing.
4. The reason why I still continue with individual stocks
If it takes that much effort, wouldn’t it be better to just use mutual funds?
I sometimes think that.
Even so, one of the reasons why I continue with individual stocks is,
because I want to aim for returns that exceed mutual funds.
Of course, buying individual stocks does not mean you will get higher returns than mutual funds.
Even for companies I researched and bought myself, there are times when they do not grow as expected.
Still, I research companies myself and invest in companies that I think will grow in the future.
And as a result, I want to aim for returns that exceed mutual funds.
I still have that feeling now.
However, that is not the only reason why I continue with individual stocks.
I think I simply like analyzing and researching things.
As I research various information, there are moments when things that were previously disconnected come together.
And when what I thought about in my own way leads to actual performance and stock price movements.
The fun of that is something you can’t easily feel elsewhere.
5. I liked the act of “researching” itself
Look at the financial results.
Compare them with past data.
Research the differences from competitors.
Think about why profits are growing.
Investigate whether that market will continue to grow.
“Why is this company growing?”
“What will happen to this industry in the future?”
I quite enjoy the time spent researching while thinking about things like that.
Individual stocks certainly take time and effort.
But in my case, part of that “effort” has actually become the fun of continuing to invest.
6. I started to see the trends of the world through individual stocks
When you research one company, it doesn’t end with just that company.
You research a company.
From there, you research the industry.
Then you research related technologies and markets.
As I do that, I have naturally started to pay attention to changes in the world as a whole.
For example, when researching AI, I look not only at semiconductors but also at the massive amount of electricity used in data centers.
From there, I have researched energy, and my interests have even expanded to new technologies and the space sector.
Every time I research, it is not rare to be surprised by things like, “There is such a technology.”
At first, I was just researching one company, but from there, a world I didn’t know before keeps expanding.
The investment I started to grow my money has, before I knew it, also become a way for me to learn about the world.
This is one of the things I am glad I have continued doing with individual stocks.
7. That is why I continue to hold both investment trusts and individual stocks
Having continued both for about 10 years, I now assign them different roles.
Investment trusts are the foundation of my asset building.
I accumulate them steadily and continue for the long term.
Individual stocks are for aiming for returns that exceed those of investment trusts.
At the same time, there is also the joy of researching companies myself, thinking, and learning about changes in the world.
I do not think it is a matter of which one is superior.
There are people who do not want to spend much time on investing, and there are people who enjoy researching companies itself.
In my case, I did not choose one over the other, but settled on a form where each has a different role.
When I first started investing, I was always thinking, “Which stock should I buy to make a profit?”
But now,
What kind of investment can I continue without strain?
I believe that knowing this is also important for continuing to invest for a long time.