Currently, the likelihood of the Bank of Japan raising interest rates is very high. This has particularly significant implications, as a large amount of capital flowing into Bitcoin and the cryptocurrency market has come from the cheap Japanese yen. When interest rates in Japan rise, this capital is likely to gradually withdraw from risky assets, including cryptocurrencies.
In this context, the top priority is no longer high profits, but safety. Initial signs of an economic crisis are gradually emerging, and this is not the time to take risks with technology or AI stocks – sectors that often face significant pressure when global capital flows reverse.
A reasonable strategy at this stage is to maintain a higher cash ratio, or allocate into short-term government bonds to preserve capital. Alongside this, investors may consider stocks belonging to the essential consumer goods and fast-moving consumer goods sectors.
Whether the economy is in recession or not, people still have to go about their daily lives: washing face, bathing, shampooing, eating, drinking, even having a familiar can of soda. These needs hardly change with the economic cycle.
Just by observing closely, we can see that foreign investors have recognized this early on. They continuously expand and control businesses in the consumer goods and essentials sectors in the domestic market. When entering supermarkets today, most familiar brands have some degree of foreign capital behind them.
The strength of these businesses is their ability to 'go through cycles'. When monetary policy is relaxed, they can raise product prices. When monetary policy is tightened, they still maintain stable prices, ensuring consistent and healthy cash flow.
In uncertain times, not every strong growth is a wise choice. Sometimes, the greatest victory for an investor is to preserve capital and patiently wait for clearer opportunities in the future.
