2024-02-11 02:00:00
Towsil:Even so, the fact that you receive 235,000 yen in dividends other than your salary is a very encouraging situation in these days of inflation. If you want to start a life with such high dividends, what steps should you take?
Long-term stock investment:The first thing to do is to start investing now. In 2024, the new NISA (Small Investment Tax Exemption System) will start, improving the investment environment and making it easier for even beginners to start investing.
We believe it is important for people to start investing, even if it is just a small amount, such as 5,000 yen or 10,000 yen.
Also, the main premise is to work hard and study hard, and keep in mind that not everything will go well from the beginning.
Towsil:What brand should beginners choose to avoid making mistakes?
Long-term stock investment:When choosing an investment destination, one of the factors to consider is the top-class companies in the industry. Although this is not an absolute guarantee, we will pick companies that we can easily imagine will still be around 20 years from now.
For example, major megabanks and general trading companies will probably still be around 20 years from now. After picking up a company, check the company’s policy and see if the dividend will be increased or decreased continuously. On top of that, it is important to buy stocks when the stock price is as low as possible.
In my book published in May 2023, I write regarding the steps of investing, such as this for the first month of investment, and this for the second month. If you are a beginner, you may want to start by imitating this. First, try copying them and buy stocks of leading companies little by little, and get used to the market price. Once you get used to it, you can start showing your own unique colors.
Towsil:When investing, should you aim for a rise in stock prices? How big is the return? Which one?
Long-term stock investment:Increasing returns is not easy. Therefore, rather than aiming to increase returns, it is better to first aim to get used to the market.
In the beginning, focus on continuing with methods that are difficult to lose or lose. There is no such thing as “perfect” from the beginning, and there is no “correct” answer to investing in the first place, so it’s a good idea to buy little by little using dollar-cost averaging and get used to the market price.
Towsil:“There is no right answer when it comes to investing” is a good saying.
Long-term stock investment:yes. The correct answer depends on the individual. Don’t copy someone else’s success and lose sight of what you originally wanted to do.
Once you get used to the market, you should also get used to looking at investment indicators such as PER (Price Earnings Ratio) and PBR (Price to Book Ratio). These are indicators that show whether a stock is currently overvalued or undervalued. Make sure that the index is cheap and be able to “buy when it’s cheap.”
However, you don’t need to do that much. You just need to understand the basics. One is whether you are satisfied with the dividend yield you envision.
The other thing to look at is EPS (earnings per share) and whether you are satisfied with the stability of business results.
If business performance is stable, the accuracy of investment indicators will be higher to a certain extent. This makes it easier to make decisions, and a low P/E ratio means that the current stock price is cheap.
I think you will be able to make the correct judgment as to whether the reason the stock is undervalued is because it is inherently cheap, rather than because it takes into account deterioration in business performance. Furthermore, PER and PBR have a range for the past five years, so if you look at that range and get to the point where you can buy at a lower price, I think you will hardly lose.
Towsil:How long will it take to reach that point?
Long-term stock investment:I don’t think it will take more than a year. I think you can get this far if you just stick to the basic important things. In summary, there are three steps you should take:
- Get used to the market
- study the points
- Invest based on assumptions regarding dividend yield, EPS stability, and PER
Towsil:It is important to study while doing things, rather than starting following studying.
Long-term stock investment:I agree. Just like in sports, you need to get used to something before you can do it, so if you don’t start, you won’t get started. However, if you do it blindly without any knowledge, you will reach a plateau. To improve your technique, you also need to study. I think investing is the same way.
Nowadays, there are stocks where you can buy one share for the same price as the price of one 500ml plastic bottle, and there are also stocks where you can get shareholder benefits in addition to dividends. Try buying one share from one of these and see how it goes. I think it’s a good idea to buy one share a day and aim to own 100 shares, which will give you shareholder benefits. If you buy one share at a time, you won’t lose that much.
For young people, it might be a good idea to start investing in individual stocks, earn dividends, and deepen your understanding of corporate activities by investing more in index investments instead of just individual stocks to get an average return. Is it?
The benefits of investing go beyond asset formation. Learning regarding companies and knowing their strategies in order to make investments can be applied to your own work. I think it’s a good idea to invest from that perspective.
Towsil:Please tell us regarding your current activities at Long Term Stock Investment.
Long-term stock investment:I quit my company at the end of March 2023 and became independent. Starting the next month, I will be holding an online investment class for one year to teach students regarding investing. This is my main activity for the past year. It’s almost been a year, and it feels like a break.
In addition to online investment classes, I have been engaged in other activities such as giving seminar lectures upon request and publishing my second book at the end of May. I have been communicating on X (formerly Twitter) and blogs since my days as an office worker.
Towsil:Is the online investment class that is your main activity aimed at beginners? What is the age range of the participants?
Long-term stock investment:Well, it’s aimed at beginners. I don’t know the exact age group, but it seems like there are more people in their 40s, 50s, and 60s, a little older. At the seminars held at the venue, there are many participants in their 50s and 60s, while participants in their 40s are younger.
Personally, I feel that there is a lack of dissemination of investment information to people of this age group. People in their 20s and 30s have plenty of time and can build assets through index investing, but people in their late 40s and above don’t have the time to do such leisurely things.
Even so, what I often see is information such as “Beginners should start with index investing.” I think that what many people in their late 40s and above are looking for is an investment in which they can receive dividends to cover their living expenses, but I feel that there is little information dissemination that can meet this demand. . This is what I realized following taking online investment classes for regarding a year.
Towsil:Will the online investment class continue beyond the second year?
Long-term stock investment:I’m thinking of doing it eventually, but I don’t have any plans to recruit second-generation students right away. I guess I’ll sort out the issues that came to light in the first year, and then I’ll be ready.
Investment results cannot be judged by scores like studying for an entrance exam. When it comes to online courses, it’s even more difficult to measure your ability. Over the course of nearly a year, I have seen whether the students’ skills have improved in terms of the quality and level of their questions.
From what I’ve seen, I feel that if you study for 10 months, you’ll be able to acquire a certain level of knowledge necessary for investing, including how to look at companies. I’m glad I tried it.
Towsil:Please tell us regarding your future prospects.
Long-term stock investment:The first step is to complete the online investment class for first-year students, which will end in March. After that, we will continue to provide information regularly through our blog and X.
Regarding investment, I will continue to invest one or two shares a day every business day and keep a record with X.
Japanese stocks are also being bought quite a lot, and I think the environment is becoming difficult to invest in. However, if a company’s performance improves and its earnings per share increase, it is possible to think that the stock price level will become cheaper. I would like to keep a close eye on the financial results for May. I would like to continue to use dividend yield, EPS, and PER as the standard as before.
Towsil:Lastly, please give a message to our readers.
Long-term stock investment:If you are a beginner, I would like you to start. The new NISA has started, and I would like to tell you that there is value in trying it out.
If you are reading this, I believe you are interested in investing, so I would like you to turn that interest into action. After that, I would like them to continue investing little by little as long as it is not a burden.
When I tell them that they can buy a stock for 200 yen, they sometimes ask if there is any point in buying a stock that costs 200 yen, but it is important to first establish contact, and the first step is to buy a stock for 200 yen. I think it’s worth more than that. It’s not that big of a burden if you start with just one stock, so please take the first step.
＞＞Part 1 “Dividend income in 2023 will be 3.78 million yen! Tips for choosing Japanese stocks that do not increase or decrease dividends continuously – Interview with a long-term stock investor[Part 1]”
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