From Struggles to Success: The Mental Growth of an Extreme Investor”

When I compare myself at the beginning of my investment journey to where I am now, the differences are not only in my investment style but also in my mindset. Initially, I focused on short-term trading of Japanese stocks. However, as my asset formation progressed, I shifted my investment targets and strategies. This shift freed me from anxiety and impatience, allowing me to grow into an investor who can take risks calmly and even enjoyably.

1. Early Days of Investing: Swing Trading Small-Cap Stocks

• Focusing Solely on Japanese Small-Cap Stocks
  In 2019, when I first began investing, I used my 10 million yen in savings to engage in swing trading of Japanese small-cap stocks.
  At the time, I focused on small-cap stocks because their 100-share units required less capital, making them more suitable for efficiently targeting profits with limited funds.
  My goal was to achieve 3–5% profit per trade and grow my assets quickly through short-term trading.
• Constantly Checking Stock Prices at Work
  I was so preoccupied with stock price movements that I found it difficult to concentrate on work.
  During every break, I would check stock prices on my phone, and I even monitored my portfolio’s movements while in the restroom or during commutes.
  In hindsight: Looking back, I must have appeared quite obsessive to those around me. My fixation on short-term fluctuations left me mentally strained and lacking emotional balance.
• A Cycle of Success and Failure
• Success Example: I purchased a small-cap stock and achieved a 10% profit (+100,000 yen) in just one week.
• Failure Example: Poor timing led to a 5% loss (-50,000 yen) in a single day. Panicking, I sold at a loss, only for the stock to drop further, creating a vicious cycle of additional losses.
  Over the span of several months, my initial 10 million yen dwindled to 8.5 million yen, intensifying my anxiety and frustration with investing.
• The Heavy Mental Toll
  Attempting to recover losses drove me to take increasingly reckless risks, which only worsened the situation.
  At the time, I equated falling stock prices with a decline in my own self-worth, showing how deeply investing was impacting my mental state.

Encountering The Future for Investors

It was during this challenging period that I discovered Jeremy Siegel's renowned book, The Future for Investors. This book introduced me to the long-term growth potential of the U.S. stock market and the incredible benefits of focusing on income-generating investments.

Insights and Actions

Here’s what the book taught me:

1. The Long-Term Growth of the U.S. Market
   The U.S. stock market has consistently demonstrated upward growth over the long term, supported by over 200 years of reliable data.
2. The Power of Dividend Reinvestment
   Reinvesting dividends unlocks the full potential of compound growth, enabling stable and consistent asset accumulation.
3. Focusing on the Long Term
   Rather than reacting to short-term market fluctuations, it is crucial to adopt a long-term perspective to steadily grow wealth.

This book broadened my perspective, which had been confined to the Japanese market, and inspired me to fully embark on investing in the U.S. market.

2. A Turning Point: From Japanese to U.S. Stocks, Short-Term to Long-Term Investments

The bitter experiences of swing trading small-cap stocks prompted me to fundamentally reevaluate my investment approach. By shifting from the stagnating Japanese market to the growing U.S. market and adopting long-term investment strategies, I was able to not only grow my assets but also regain mental stability.

Transition to the U.S. Market

• Shifting to the U.S. Market
  Feeling limited by the stagnation of the Japanese market, I transitioned to the U.S. market, which promised consistent, long-term growth.
  I focused on investing in index ETFs like the S&P500 and Nasdaq100, as well as high-dividend stocks, to avoid being influenced by short-term price fluctuations.
• Lessons from the COVID-19 Shock
  In March 2020, during the COVID-19 market crash, my portfolio temporarily declined by over 2 million yen. However, I stayed calm and continued to buy more.
  As the market rapidly recovered, my portfolio surpassed 12 million yen. This experience taught me to adopt a long-term perspective and trust that "the market will recover."
• Gaining Mental Stability
  My annual dividend income exceeded 500,000 yen, giving me a sense of security that my assets were growing regardless of stock price fluctuations.
  Unlike in short-term trading, I no longer felt the need to constantly monitor price movements, allowing me to focus on my work and personal life.

3. Mental Growth Through Asset Expansion

Switching to a long-term U.S. stock investment strategy not only increased my assets but also brought about significant mental growth.

• Staying Calm Amid Large Fluctuations
  Today, my portfolio often fluctuates by 300,000–500,000 yen daily and over 1 million yen monthly. Despite this, I remain composed.
  The rapid recovery following the COVID-19 crash taught me that "temporary downturns are merely a part of the asset-building process," allowing me to view them with confidence.
• Gaining Confidence
  As my assets grew, I stopped reacting emotionally to market movements and became more willing to take calculated risks.
  Currently, my annual dividend income exceeds 1.5 million yen, reinforcing the sense of security that "as long as there is dividend income, my assets will continue to grow steadily."

4. Enjoying Investing and Embracing Risk

As my portfolio grew, so did my perspective on risk.

• A "Crashes Are Buying Opportunities" Mindset
  Instead of seeing market crashes as losses, I now view them as opportunities to purchase undervalued assets.
  For example, during the 2022 market correction, my portfolio dropped by nearly 3 million yen. However, I used this as an opportunity to increase my positions, ultimately strengthening my portfolio.
• Becoming an Investor Who Enjoys Risk
  With over 30 million yen in assets, I now use surplus funds to explore high-risk sectors, embracing the excitement and opportunities they offer.

5. Conclusion: Investing as a Process for Mental and Personal Growth

The struggles I faced early on with small-cap swing trading shaped who I am today. Transitioning to the U.S. market and adopting long-term investment strategies allowed me to grow my assets while also experiencing significant mental growth.

• From Anxiety to Calmness
  While I used to panic over daily losses, I now remain composed even amid substantial fluctuations, understanding the importance of a long-term perspective in investing.
• The Decision to Change Arenas
  Moving from the stagnation of the Japanese market to the growth-driven U.S. market, and transitioning from short-term to long-term investing, significantly reduced mental strain and improved the efficiency of my asset-building efforts.
• Becoming an Investor Who Embraces Risk
  The increased confidence and stability gained from growing my assets have enabled me to enjoy investing while managing risks effectively.

Reflecting on my early days of obsessively checking stock prices at work, I realize how far I’ve come—from being controlled by market movements to making them work in my favor. Investing has not only built my wealth but also strengthened my mental resilience and enriched my life as a whole. I hope my experiences provide some inspiration and guidance to other investors on their own journeys.