Introduction: Why Investors Look Beyond Stocks and Bonds
In today’s markets, investors are seeking alternative investments such as real estate, private equity, commodities, and hedge funds.
These assets often move differently from traditional stocks and bonds, helping to reduce overall risk.
This strategy is not new. Over 400 years ago, a Japanese leader used similar principles of diversification and patience to secure lasting success. His name was Tokugawa Ieyasu.
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What Are Alternative Investments?
• Definition: Assets outside of stocks, bonds, and cash.
• Examples: Real estate, private credit, infrastructure, commodities, private equity, and venture capital.
• Benefits:
• Lower correlation with stock markets
• Potentially higher returns
• Protection against inflation
• Risks: Less liquidity, higher fees, and complexity
By adding alternatives, investors aim for balance, stability, and long-term growth.
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Lesson from History: The Battle of Sekigahara (1600)
The Battle of Sekigahara was a decisive conflict in Japan that ended decades of civil war.
• Background: After Toyotomi Hideyoshi’s death, two factions emerged. Ishida Mitsunari led the Western Army, while Tokugawa Ieyasu led the Eastern Army.
• Ieyasu’s Strategy:
• He did not rush into battle.
• He spent months building alliances with rival lords.
• By securing loyalty and spreading risk, he made sure that when the battle began, many “Western” generals secretly supported him.
• Result: Victory at Sekigahara, leading to over 250 years of Tokugawa rule.
Ieyasu’s wisdom was clear: don’t bet everything on one uncertain outcome. Prepare, diversify, and move only when the odds are in your favor.
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How Ieyasu’s Strategy Relates to Investing
1. Diversification
Just as Ieyasu spread alliances across many lords, investors should spread capital across multiple assets.
2. Patience
Ieyasu waited for the right moment, just like long-term investors wait through market cycles.
3. Risk Management
By reducing reliance on a single battle outcome, he ensured survival. Similarly, alternatives help reduce reliance on stock markets alone.
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Conclusion: Building Castles with People and Portfolios with Assets
Tokugawa Ieyasu’s success at Sekigahara was not luck. It was the product of risk management, diversification, and long-term vision.
Modern investors can apply the same wisdom by considering alternative investments.
In both war and finance, survival and victory belong to those who plan for uncertainty.
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