It is often said that āJapanese people have a low risk tolerance. - risk tolerance
An interesting point on the topic of
iida_yasuyuki Actually, Iām on shaky ground here.
While Japanese households are safety-oriented in terms of asset formation (favoring deposits and bonds), the share of variable interest rates as a liability is significantly higher than that of other developed countries.
I feel that the perception of risk has some unique characteristics.
StrayRabbitchan I also borrow at a variable rate, which is super gambling when you think about it. For decades, I have been unconsciously in a high risk state.
A few months ago, Dr. Iida made this point and I thought heeā¦
hiropon411208 Mortgages may be part of the belief in owner-occupation.
iida_yasuyuki I feel the faith issue is quite important.
I buy individual real estate (which has a lot of individual risk) with risky debt to begin with. Maybe Iām conservative about financial assets because Iām taking a lot of risk here.
- Individual real estate is even riskier than buying individual stocks.
- Itās like the Barbell Strategy of taking high risk in one place and low risk in the rest.
- But I donāt feel that the majority of people have that kind of perception.
Hideaki_Koshiba Interest rates have been low for a long time and I think normalcy bias is included.
iida_yasuyuki I think that is also quite convincing. Also, there are many possibilities, such as because everyone chooses to use variable, myopic (because itās cheap now), and so on.
kotorahiromi Instead of saying they are too scared to invest, they take out a loan to buy a single family home with zero property value in 20 yearsā¦ ā¦ I think itās a rather strange financial situation.
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