Market Movements Driven by Institutional Investors and Survival Strategies for Individual Investors

Hello. This is your reporter, Sanaichi.

Today, using the quiet time of the weekend, I will explain in detail, in a practical-needs-focused mode, the essential structure driving the current stock market and the reality that individual investors are facing.

In conclusion, the current market is determined less by the trends in the dollar-yen exchange rate and more by the movements of institutional investors, who drive the majority of the market, and the price action of high-priced stocks concentrated in the constituents of the Nikkei Semiconductor Stock Index.

In the U.S. July employment report released last night, non-farm payrolls fell by 23,000 from the previous month, recording a negative growth that significantly missed the market expectation of an 80,000 increase. Meanwhile, the unemployment rate fell to 4.1 percent, but this was influenced by a decline in the labor participation rate, showing clear signs of weakness in the foundation of employment. Immediately after this announcement, the dollar was sold off in the foreign exchange market, briefly plunging to the 156 yen level, but it has since been pushed back to around 157.80 yen, continuing a complex development where one cannot simply be swayed by the direction of the exchange rate alone.

👉U.S. Employment Report note article link

An important perspective here is the presence of the players leading the market. The current Nikkei Stock Average and the Nikkei Semiconductor Stock Index include many high-priced stocks that significantly push up the Nikkei Average, such as Advantest and Tokyo Electron. And it is institutional investors, such as funds that intentionally or structurally control the market, who are moving massive amounts of capital in these individual stocks and the futures market. The reality is that the entire market is being pushed up to high price levels as they use the U.S. SOX index, the decline in long-term interest rates, and strong earnings reports as material to place futures and index buy orders.

However, in such a high-price market led by institutional investors, it is extremely difficult for individual investors to win in short-term trading of individual stocks. Looking at the charts, the market is consolidating at high levels, and because the price movements become more volatile the shorter the timeframe, the reality is that individual investors are easily forced to cut their losses. From the perspective of a professional reporter or writer, there is not necessarily a need to take risks in highly uncertain short-term trading.

For investment beginners who absolutely want to make a profit from semiconductor stocks or want to benefit from the growth of the semiconductor market, finding Nikkei Semiconductor Stock Index-linked investment trusts, index funds, or ETFs, which can reduce the risk of being swayed by the fine price movements or noise of individual stocks, is a more realistic option. The Nikkei Semiconductor Stock Index is composed of 30 major semiconductor-related stocks listed on the Tokyo Stock Exchange, and it has the characteristic of being top-heavy, with top stocks such as Kioxia Holdings, Tokyo Electron, Advantest, Disco, and Renesas Electronics accounting for a large portion of the weight. Specifically, utilizing TSE-listed ETFs like the NEXT FUNDS Nikkei Semiconductor Stock Index-linked ETF or unlisted index funds is a practical option.
👉Nikkei Semiconductor Stock Index-linked Fund note article link

👉AI Investment/Semiconductor-related note article link

Furthermore, the U.S. July Consumer Price Index (CPI) is scheduled to be announced next week on the 12th. Even if employment is weak, if inflation re-accelerates, the Fed cannot easily loosen monetary policy, which will raise concerns about stagflation. Therefore, it is essential to manage risk thoroughly rather than easily jumping into the current stock price rise while being swayed by the movements of institutional investors.

Incorporating the perspective of a financial planner, when you use your limited weekend time to check your asset allocation or portfolio, please try confirming the following steps.

* Confirm that you have secured a living defense fund equivalent to 3 to 6 months of living expenses and that you are investing within the scope of your surplus funds.

* Check if the ratio of semiconductor-related or high-priced stocks in your current holdings is excessively high, and whether your asset allocation is appropriate for your asset size and risk tolerance (how much of a price decline you can withstand).

* If your portfolio is centered on individual stocks that cannot withstand short-term price movements, consider diversifying into index funds or switching to a systematic investment plan (dollar-cost averaging) rather than investing the full amount at once.

* Looking ahead to the U.S. CPI announcement on the 12th and future economic indicators, avoid excessive leverage or investments that exceed your surplus funds.

In a phase of real economic slowdown, calm risk management based on solid facts and a review of asset allocation are essential. Not being swayed by the noise created by institutional investors and accurately deciphering the structural changes behind the numbers will be a reliable guide for surviving an uncertain market. Why not use your quiet weekend time to review your own asset allocation?

※This article is for informational purposes only and does not recommend the buying or selling of specific stocks or investments. Please make actual investment decisions at your own responsibility.

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