HOW CAN AN INVESTMENT TRUST SELECTED BY AN “INVESTMENT PROFESSIONAL” BE USED AS A REFERENCE FOR SELECTING ONE’S OWN STOCK?

One of the pleasures of investing is “expectations for increased assets”. The process of thinking about which stocks to invest in will make more money is fun.

However, summarizing the materials of the Japan Exchange Group, more than 3,800 companies are listed on the stock market in Japan as of the end of February. It takes more than a year to check 10 stocks a day. If you are discovering investment stocks from this, you will not have enough time. You will also miss the timing of your investment.

Therefore, this time, I will tell you how to use investment trusts for free to narrow down the investment destinations.

ADVANTAGES AND DISADVANTAGES OF STOCK SELECTION USING FUNDS

Active funds have a team to select investment stocks based on their own criteria. A person in a job called an analyst is in charge of a specific industry, and is investigating whether there is a company in each industry that meets the theme of the fund.

Specifically, we will evaluate investees by comprehensively considering financial data analysis, interviews with management, and the market environment. If it is an active fund that invests in Japanese stocks in general, it covers all industries. Using the data created by the analysts, the fund manager decides where to invest and how much to invest.

You can see what percentage of your money is invested in which company by reading the reports and prospectuses that are the sales materials of active funds. If you are having trouble finding an analysis method even if you purchase an information magazine such as “Company Shikiho”, it is a good idea to start by examining the stocks invested by the investment trust.

Using this method will significantly reduce survey time. If there is a company you are interested in among the stocks invested in by the fund, you can buy it. That way, all you have to do is look at the fund’s materials, so 10 minutes should be enough.

You can save a lot of time on stock selection, but it’s too early to invest on its own. For example, the situation is different when you want to invest in a company called A and when the active fund used for stock selection makes an investment. Even if the price is low when the fund invests, there may be cases where the price has risen since then.

IT IS IMPORTANT TO ESTABLISH INVESTMENT STANDARDS

Even if the price has already risen and you can’t buy the stock, it’s important to think about why the investment was chosen. The reason why the stock was selected as an investment target is that it is in line with the investment policy of the active fund.

The fund limits the investment target by setting the investment policy. Find a company that is suitable for investment from a limited investment target.

When that happens, it becomes important to find a fund that you are comfortable with. Each active fund has its own investment story. The point is which story you find attractive.

The stocks selected by the fund’s investment policy that you find attractive are likely to be the companies you want to buy. If you don’t see a stock that comes to your mind, then either your selection or the fund’s selection is out of sync.

It’s also a good idea to find a fund with an exciting story by comparing the contents of various active funds.

HOW TO UNDERSTAND THE REASON FOR INVESTING IN A FUND?

Depending on the fund, the reasons for selecting individual stocks may be clearly stated. That information can also help you determine if you are a company to invest in.

Active funds can be broadly divided into two types depending on the stock selection method. The difference between value investment and growth investment: buying a stock that is considered cheap at the moment or buying a company with a future.

Another timeline is whether you are choosing an investment target for the next few years. The reasons for investing in the same stock differ depending on whether the investment destination is reorganized within one year or whether it is a long-term investment looking five or ten years from now.

There are few funds that carefully specify the reasons for selecting individual investment destinations, so it is a good idea to search for funds that disclose the reasons for selecting stocks. Among the independent investment trusts I mentioned last time, there are also funds that individually specify the reasons for stock selection.

ACCESS TO INFORMATION NOT KNOWN TO INDIVIDUALS

Analysts in active funds have the opportunity to speak directly to the management of the investee company. The information that the management himself tells may be important content that ordinary investors cannot touch.

At the very least, you can meet the management just by being a fund analyst. Analysts or fund managers are likely to find investment opportunities, even if they don’t understand why they are investing by looking at where the fund is invested.

If you think you can’t be a connoisseur of a stock, it’s a good tactic to buy some stocks from the fund’s investees, depending on your budget. However, at the very least, it is assumed that the fund you use as a reference for stock selection has a good past management record.

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