When the market goes up for six months straight, every fiber of my body wants to buy more. “I’ll catch up.” “I’m missing the rally.” “Everyone else is making money.” I’ve learned, painfully, that those feelings are exactly when to not change my plan.
The Bull Market Trap I Fell Into
In early 2024, the Nikkei broke through 40,000 for the first time. I’d been investing ¥100,000/month on autopilot. I felt smart, I felt rich on paper, and I decided to “accelerate.” I bumped my monthly investment to ¥200,000 and put a one-time ¥500,000 lump sum into S&P 500.
Six months later, the market corrected 12% in eight weeks. My oversized position turned a paper gain into a paper loss, and my emergency cash buffer was now thin because I’d diverted it into stocks. I had broken my own plan because the market was going up.
3 Reasons I Stay Disciplined Now
1. I cannot tell the difference between a bull market and a bubble in real time
In hindsight, every bubble looks obvious. Living through it, every bubble looks like a “bull market.” 1999 felt like a bull market. So did 2007. So did early 2022. I am not smart enough to identify which is which while it’s happening, and neither are professionals.
2. My income doesn’t grow when the market grows
If I’m a salaryman making ¥600,000/month, the market doubling doesn’t double my salary. So if I increase my investment to “match the rally,” I’m just compressing my cash buffer. When the correction comes, I have less margin.
3. Compounding is already doing the work
If I invest the same ¥100,000/month consistently for 20 years, the compounding math is already insane. I don’t need to add to it during good times. I need to not subtract from it during bad times. That’s the actual game.
What I Do Instead During Bull Markets
- Keep investing the same monthly amount regardless of what the market is doing
- Rebalance once a year to my target allocation — selling some winners, buying laggards
- Top up my emergency cash buffer with any extra cash from bonus or windfalls — bull markets are when buffer building is psychologically hardest
- Save extra cash in a “dry powder” account that I’ll deploy only if the market drops 20% or more from peak
The Mental Model That Helped Me
Think of investing as climbing a mountain at altitude. The higher you climb, the thinner the air, the more careful you should be — not the more aggressive. Bull markets are altitude. The reasonable response is steady steps, not sprinting.
My grandfather (a small business owner who lived through Japan’s 1980s bubble and the lost decade) told me once: “The people who lost everything weren’t the ones who didn’t buy enough. They were the ones who bought the most at the top.” That sentence echoes in my head every time I’m tempted to chase a rally.
Summary: The Discipline System
- Set your monthly investment amount when you’re calm and the market is flat — that’s your “true” amount
- Automate the purchase so emotion never enters the decision
- Re-evaluate your amount only once a year, on the same date, regardless of market conditions
- Build a “dry powder” reserve during bull markets so you have ammunition for the inevitable correction
- Read your old plan when you’re tempted to deviate — your past self was smarter than your hyped present self
The best investor I know hasn’t read a market commentary in five years. He just keeps doing the same thing every month. He’s the wealthiest non-business-owner I know. That’s the lesson.
Disclaimer: This article is for informational purposes only and is not investment advice. It does not recommend any specific financial product. Investment decisions are your sole responsibility, and you may lose your principal. Tax rules and financial regulations described here reflect the situation as of 2026 in Japan and may change. Please consult a licensed advisor or the official sources (FSA, NTA, MOF) for the latest information.
