https://t.co/ieRqJXCyA5 [Investor Levels in the AI Era]: Do You Know Your Current Level? The “5 Levels of Investors” to Survive Market Crashes and True Wealth [Analysis by Former Nomura Securities Analyst] Veteran Securities Expert Johnny-san #AISummary The 5 Levels of Investors and the Judgment Needed to Survive Market Crashes 🔳 Five Levels That Define Investors Investors can be categorized into five levels: from beginners seeking definitive answers, to experienced investors who develop their own decision-making framework, and ultimately to those who articulate and influence others with their unique investment philosophy. 🔳 Characteristics of Level 1 Investors at this stage seek specific, correct answers—such as which stocks will rise or when to buy—believing that studying will lead them to the right answers. 🔳 What Level 1 Investors Need to Do It’s essential to understand that there are no guaranteed answers in investing. Even with small amounts, investors must actively participate in the market and experience unexpected price movements—both upward and downward. 🔳 Characteristics of Level 2 Investors at this level hold broad-market indices like All-World or S&P 500, following common guidelines or advice from others, and begin to feel the emotional impact of asset fluctuations. 🔳 Characteristics of Level 3 Beyond index investing, these investors start selecting individual stocks or sectors—such as semiconductors—based on their own research and past successful experiences, adopting a more proactive approach. 🔳 Caution for Level 3 Investors Investors whose experience is primarily rooted in bull markets since 2010 may have never witnessed a severe long-term market crash, risking the mistaken belief that past success equals correct investing. 🔳 The True Fear of a Market Crash In major crashes, prices don’t just drop sharply—they continue falling for extended periods, creating a psychological sense that society or the economy itself is collapsing. This level of stress is difficult to comprehend without firsthand experience. 🔳 Characteristics of Level 4 These investors have experienced both bull and bear markets. They invest with worst-case scenarios in mind, enabling them to remain calm even during severe downturns. 🔳 Weakness of Level 4 Investors Due to past crash experiences, they may consistently hold back during strong bull markets, resulting in lower short-term returns compared to Level 3 investors. 🔳 Strength of Level 4 Investors They operate under the assumption that major market crashes occur every 10–20 years, giving them the resilience to remain in the market without losing their capital. 🔳 Characteristics of Level 5 At this level, investors have built substantial wealth and now share their own unique investment philosophies, influencing other investors globally. 🔳 Caution Against Investors Who Make Absolute Claims Those who confidently assert that certain stocks or strategies will always rise may not have fully experienced—or understood—the unpredictability and terror of market crashes. ListItemIcon Why Experienced Investors Avoid Absolute Claims Long-term survivors of the market understand that even low-probability events (1–2%) can occur. They never assume they can predict the future and invest accordingly. ListItemIcon The Danger of Relying on Past Success Basing your understanding of the market solely on limited bull-market experiences can lead you to falsely believe you’ve mastered investing—increasing the risk of excessive exposure during the next crash. ListItemIcon Actions Required at Each Level Beginners should first learn the fundamentals, then gain experience with small investments, gradually increasing both capital allocation and decision-making complexity over time. ListItemIcon Don’t Invest Large Sums Too Soon Avoid deploying large amounts of capital before acquiring sufficient knowledge and experience. Scale your investments in line with your developing judgment and tolerance for loss. ListItemIcon The True Purpose of Investing Investing is not merely about growing wealth—it’s a discipline for cultivating sound judgment under uncertainty. This ability to make correct decisions is what drives long-term success. ListItemIcon Conclusion Understand which level you currently occupy. Do not rely solely on past successes; instead, steadily build experience and judgment by preparing for—and learning from—market crashes.