INFINITY News: Is a bubble coming? Experts analyze the latest market! A thorough explanation of AI investment, virtual currency, and future investment strategies. #Stock investment #Market analysis #AI investment
Video explanation
Is a bubble on the way? "Animal spirits" and market rumors
Hello, I'm John! I talk about money, health, and other difficult topics in an easy-to-understand way. Recently, have you heard people asking, "Could another bubble come?" Today, I'll talk about the market atmosphere and the "animal spirits" that are said to drive the economy in an easy-to-understand way, even for beginners.
First of all, what are "animal spirits"?
"Animal spirits" is a word that sounds strong, right? It is a word used by the economist Keynes, and in simple terms,People's moods, intuitions, and expectations" It's the kind of wild emotions that can't be explained by logic alone that can have a major impact on the economy.
For example, when everyone becomes optimistic and thinks, "The economy will improve from now on!", people loosen their purse strings, consumption increases, and companies actively invest. On the other hand, when people feel anxious about the future, they save money instead of spending it, and refrain from investing. This "somehow" atmosphere affects stock prices and the economy as a whole.
Let's learn about "Bubbles" too!
When "animal spirits" become too high, a "bubble" can sometimes occur. A "bubble" is when the prices of assets such as stocks and real estate rise to a certain level.A state in which something swells up like a balloon, beyond its actual value.This is what I mean. Everyone is buying with enthusiasm, thinking "It's going to go up even more!", so the price keeps rising. However, just like a balloon will eventually pop, there is a possibility that the bubble will also burst someday. When it does burst, the price will suddenly fall, which can have a major impact on the economy.
Check out the "money keywords" you've been hearing a lot lately!
Well, in today's market, where animal spirits are swirling (?), various topics are becoming hot topics. John will pick out a few topics and explain them in an easy-to-understand way!
- What about investing in AI (artificial intelligence)?
AI has been evolving rapidly recently! Many people seem to think, "Maybe I can make money by investing in AI-related companies?" AI technology is likely to continue to grow, but you need to be careful when investing in new technology because stock prices can fluctuate greatly.ETF (Exchange Traded Fund: A package of various stocks)is attracting attention. - Is it true that the European economy is doing well?
Not only the US and Japan, but also the European economies seem to be doing well. When you look around the world, you can see that the economies of many countries and regions are moving. In the world of investment,"Diversified investment (splitting your money into different places)"It is said that it is important to have a good understanding of the market, but this may be helpful when considering where to invest. - Are you all saving money for your retirement?
There is good news! More and more people are saving money for the future.“100-year life era”That's why it's so important to start planning and preparing early. Taking advantage of systems like iDeCo (Individual-type Defined Contribution Pension) and Tsumitate NISA are good ways to do this. - Are cryptocurrencies becoming "ordinary financial products"?
In the past, cryptocurrencies such as Bitcoin (also known as cryptos) may have been viewed as being a bit suspicious, but recently"TradFi (Traditional Finance)"In other words, it seems that they are being recognized as a more common financial product that banks and securities companies handle. With the appearance of ETFs, the number of investment options is increasing. - Will US interest rates fall?
The central bank of the United StatesFRB (Federal Reserve Board)However, there is also news that the policy interest rate (the benchmark interest rate when banks borrow and lend money) may be lowered. Lower interest rates are expected to stimulate the economy, as it will be easier for companies to borrow money and start new businesses, and for individuals to take out home loans, etc. - Are the recessions changing?
It has been pointed out that the economy may stagnate in a slightly different way than the traditional "recession." The world is changing so quickly that the way the economy moves may no longer follow the old textbook model.
Many of these topics are deeply connected to animal spirits. The market is constantly moving as "expectations" take over and "anxiety" spreads.
If a bubble comes, what should we do?
So, the question is, "Will a bubble really come?" and, "What should we do if it does come?"
To be honest, no one knows what the future holds. Some people declare that "a bubble is coming!" while others say, "No, it's still okay." The important thing is not to get too excited or upset about such information.
If a bubble comes and then pops, what can we do to avoid panicking?
- Take a long-term view:Stock prices go up and down in the short term. Don't be distracted by temporary fluctuations, but think about growing your assets in the long term.
- Diversify your investments:Just as you don't put all your eggs in one basket, you can reduce risk by not concentrating your investments in one place but by dividing them into various things. The basic principle is to diversify across countries and asset types (stocks, bonds, etc.).
- Know your risk tolerance:It is important to calmly judge how much price fluctuation you can tolerate and only invest within the limits of your ability.
- Continue investing regularly:An investment method in which you steadily save a fixed amount every month (also known as dollar cost averaging) allows you to buy less when prices are high and more when prices are low, reducing the risk of buying at a high price and also diversifying your investments over time.
No matter what the market situation is, following these fundamentals will give you peace of mind for the future.
Message from John
The source material for this article was a summary of a podcast, which introduced various topics at a rapid pace. Among them, the words "animal spirits" and "bubble coming?" were particularly interesting. The atmosphere of the market is certainly important, but I once again thought that it would be best not to be too swayed by it and to proceed with asset formation at your own pace.
This article is based on the following original articles and is summarized from the author's perspective:
Animal Spirits: A Bubble is Coming