Smart Ways to Manage Investment Trusts

 [Smart Ways to Manage Investment Trusts]

Investment trusts are the most realistic and intelligent way for beginners to intermediate-level investors to grow their money.

However, "how you manage" your investments is far more important than "what you buy."

Below, we'll clearly explain smart ways to manage investment trusts.

🧭 [Premise] Basic Rules of Investment Trusts

The goal is not to "make money quickly," but to "grow your assets over the long term."

Adhering to the three principles of Time x Accumulation x Diversification is crucial.

🪙 1. Thoroughly Implement Dollar-Cost Averaging (Accumulation Investment)

👉 Automatically investing a fixed amount each month is the smartest investment method.

Benefits:

You buy less when prices are high and more when prices are low.

There's no need to time the market.

You'll psychologically view "downturns as opportunities."

📘 Example:

30,000 yen per month x 5% annual return x 20 years of investment

→ Approximately 12.38 million yen (principal 7.2 million yen)

🌍 2. Reduce Risk Through Diversification

Smart investors don't concentrate on "one country or asset."

By diversifying risk, you can aim for stable returns over the long term.

Recommended diversification patterns:

Geographic diversification: Japan, the US, emerging countries, etc.

Asset diversification: Stocks + Bonds

Time diversification: Monthly accumulation

📊 Popular choices include:

eMAXIS Slim US Stock (S&P500)

eMAXIS Slim Global Stock (All Country)

Rakuten VTI (US Stocks)

⏳ 3. Maximize the Power of Compounding Through Long-Term Investment

Investment trusts are financial products that "make time your ally."

Holding them for 10 or 20 years is the secret to success.

It takes approximately 14 years for assets to double with a 5% annual return.

By continuing monthly contributions, the compounding effect accelerates growth.

👉 The "courage not to sell" is your greatest weapon.

🧘‍♂️ 4. Rebalancing (Annual Maintenance)

In long-term investing, the balance of your assets gradually shifts. Therefore, once a year, we rebalance the portfolio back to its "original ratio."

Example:

Planned allocation: 80% stocks, 20% bonds → Stocks rise to 90%

→ Sell some stocks and buy more bonds to return to an 80:20 ratio

👉 This naturally allows you to "sell high and buy low."

🚫 5. Actions to Avoid (NG Actions)

NG Action | Reason

Selling in a panic when the market falls | Locks in losses

Being influenced by social media and news | Getting swayed by noise

Taking a gamble on high-risk funds | Turning it into gambling

Frequently switching investments | Incurs fees and timing losses

💼 6. Utilizing Tax-Exempt Systems (Extremely Important)

Smart investors maximize the "benefits of the system."

New NISA (2024~)

→ Up to 3.6 million yen per year can be invested tax-free

→ Effectively combine the accumulation and growth investment frameworks

📘 First:

Automatically invest in index mutual funds using the Tsumitate NISA framework (1.2 million yen per year)

If you have extra funds, consider US stocks and ETFs in the growth investment framework

📈 7. The "Golden Rules" of Smart Investors

① Long-term

② Accumulation

③ Diversification

④ Hands-off approach

By following these four rules, most people can achieve a 90% success rate in mutual fund investing.