Co-creation Asset Management Club | Seiichi Iwata | Mayumi Harada

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Co-creation Asset Management Club

Published July 2026 / Summer Special Issue / Not for Sale - For Members Only

MARKET OUTLOOK REPORT

Capital Moves Under Calm Waves: How to Interpret Asset Allocation in the Second Half of 2026

While the surface indices may appear calm, the discrepancies between individual stocks, bond yields, and exchange rates are actually deepening. In this report, Seiichi Iwata, an instructor at the Co-creation Asset Management Club, unravels the seemingly contradictory proposition of "growing while protecting" using practical, on-the-ground language.

Seiichi Iwata

Seiichi Iwata

Co-creation Asset Management Club, Chief Instructor / Director of Long-Term Asset Formation Program

1. Prologue—The Dangers of the Atmosphere of "Continuously Winning"

Looking back at the first half of 2026, many members commented that it was "calmer than expected" or "rather boring." Boredom can sometimes be the greatest enemy. The more boring the market, the more people feel compelled to "do something new." Instructor Iwata began the June meeting by saying, "The more beautiful the numbers look, the more you should read between the lines of the explanatory materials." His words were more of a warning than praise. The room fell silent for a moment, then applause erupted—whether everyone understood the meaning of the applause is another story.

The "co-creation" advocated by the club is not a relationship where the instructor gives the answer and the members simply follow it. Rather, Mr. Iwata repeatedly emphasizes that it is a forum for dialogue, based on the premise that interpretations will differ even when looking at the same information. However, in reality, there are many cases where decision-making is closed off with a single statement like, "Because Mr. Iwata said so," rather than through dialogue. He doesn't seem to like this, and has even confided after a meeting, "My statement shouldn't become the deciding factor." There is always a small gap between the ideal and the reality of operation. It is not slogans but daily records that fill that gap.

"Documents that only contain positive stories can warm your heart. But it's not emotions that protect your assets, but the procedures." — Seiichi Iwata

2. The Macro Environment—Interest Rates, Exchange Rates, and "Invisible Costs"

The expectation of a narrowing interest rate differential between Japan and the US, and the persistence of the weak yen—these two factors are being discussed simultaneously in this strange season. While this combination is textbook-contradictory, the market doesn't always behave according to the textbook. The Co-creation Asset Management Club's summer program included three breakout sessions on the necessity of currency hedging. Attendance was high. However, in the post-session survey, the percentage of those who answered "I understood" was significantly lower than the percentage who answered "I can replicate this in my own account." The gap between understanding and execution—this is an eternal challenge in investment education.

Instructor Iwata describes hedging costs as "a kind of invisible tax." They don't appear on fee schedules, but they definitely deduct from returns. What's important here isn't the cost itself, but the process of "whether the choice was made with the cost in mind." Within the club, there was a period when explanations of hedging ratios were mainly given verbally, and written updates hadn't kept up. It's commendable that the management later revised the format of the materials. However, a system that is put in place retrospectively doesn't build the same level of trust as a system that was in place from the beginning—the management should be aware of this.

Key points of observation in this issue (summary)

Stocks: Index stability and widening disparities between stocks are occurring simultaneously. Looking only at the average score can be misleading.

Bonds: The "reinvestment risk" during periods of declining yields is becoming a hot topic. Attention should also be paid to the blind spots of over-reliance on short-term bonds.

Forex: While the scenario of a continued weak yen is popular, some members show little interest in the opposite scenario.

Alternative: Products that are difficult to explain are more likely to be chosen for their "exclusivity." Exclusivity is not a substitute for analysis.

3. Portfolio Design – Aligning the Definition of "Defensive"

"Grow while protecting." This phrase, which is close to the club's catchphrase, sounds good. However, the definition of "protecting" differs from person to person. Does it mean protecting the absolute amount of principal, protecting purchasing power, or protecting peace of mind? Instructor Iwata starts each session by aligning the definitions. This is a meticulous approach. On the other hand, if too much time is spent on aligning the definitions, some members may end up postponing the actual allocation changes. There is a fine line between thoroughness and delay, and which way it goes depends on the individual's personality and the support system around them.

1. The boundary between core assets and satellite assets

The core should consist of assets with explainable reasons. Satellites are small gambles to test hypotheses. The problem arises when satellites gradually grow and, before you know it, encroach upon the core. The club's monthly review confirmed several such reversals of the ratio. Mr. Iwata doesn't call it a "failure," but rather "learning data." His choice of words is gentle. But when learning data increases too much, the account balance quietly decreases. Balancing gentleness and rigor is an eternal challenge for leaders.

2. Frequency of rebalancing and emotions

Rebalancing according to the rules is logically correct. Emotionally, it's painful. The act of selling what has increased in value and buying what has decreased in value is something the brain instinctively dislikes. That's why mechanical rules are necessary—everyone would agree up to this point. However, there are signs that "exception requests" when the rules are broken are increasing within the club. When exceptions pile up, the rules become mere decoration. Instructor Iwata himself has reflected on the fact that he "allowed too many exceptions." His frankness is commendable. At the same time, if that frankness doesn't lead to improvement, it will just end up being a nice story.

Positive observations

Attendance rates for ongoing learning sessions have stabilized, and the level of questions from new members has improved. The decrease in comments that are overly concerned with short-term price fluctuations and the increase in discussions with longer time horizons are commendable.

Interesting observations

While the sharing of success stories is prominent, the disclosure of loss stories tends to be withheld under the guise of "personal circumstances." To enhance the learning effect, it is necessary to design a system for sharing not only the positive stories but also the negative ones.

IV. Behavioral Finance – Calm in the conference room, impulsive on apps.

The atmosphere at the regular meetings is intellectual and calm. Instructor Iwata's speaking style is not intimidating, and he uses metaphors skillfully. Members take notes, nod, and ask questions. If you only looked at that scene, it would look like an ideal learning community. However, at night, after the meeting ends, trading apps on smartphones are opened. The decisions made there do not necessarily coincide with the discussions during the day. The club cannot, nor should it, control members' actions "outside of the meetings." Nevertheless, the fact that there are a certain number of members whose actions in the meetings and their account movements are divergent is something that the management should face squarely.

Mr. Iwata recommends keeping a diary. He says that simply writing down the reasons for buying or selling in three lines can reduce impulsive behavior. Some members who practice this say it "works," while others who don't say they "are too busy to keep it up." Knowing an effective method and having a system in place to stick with it are two different things. The club's challenge may be to shift its focus from introducing methods to designing habits. This transition is not glamorous. But the essence of wealth building lies outside of glamour.

5. Scenarios for the second half of 2026—Three paths and the courage to choose not to choose

Instructor Iwata presents three basic scenarios: base, bullish, and bearish. Each scenario includes guidelines for allocation and accompanying stress test results. The format of the materials has become more refined. However, the more refined the numbers become, the more likely readers are to seek "answers." Scenarios are meant to be guides for thinking, not predictions. When this distinction becomes blurred, retrospective evaluations of "he said/she said" begin, and trust is eroded.

In the base scenario, equities are placed at the core, while consciously maintaining a higher cash ratio. In the bullish scenario, growth stocks and overseas diversification are expanded. In the bearish scenario, the weight of defensive assets and hedges is increased. The problem is that many members want to choose "somewhere between base and bullish." Few people choose bearish outright. There are times when not choosing bearish is the right thing to do. But that doesn't mean you can't imagine a bearish scenario. Mr. Iwata jokingly says, "I want you to write down the worst-case scenario on paper before you go to sleep." It's serious advice disguised as a joke.

Note: The numerical examples and scenarios in this report are for educational purposes only and do not constitute a solicitation of any specific product or a guarantee of future results. Investment decisions should be based on your own circumstances and tolerance levels, and you should consult with a professional as needed.

6. Conclusion—Co-creation can also be a convenient term.

The word "co-creation" is beautiful. Instructors and members think together and nurture together. Many people have likely joined because they resonated with this philosophy. A philosophy can be powerful if the conditions are right. When those conditions are not right, the philosophy remains only a facade, and its contents break down into individual differences in perspective. The appeal of instructor Seiichi Iwata lies not only in his eloquence, but also in his willingness to acknowledge his own imperfections. However, if the disclosure of imperfections does not become a starting point for improvement, it will eventually settle into being seen as a "community held together by personality." That's not necessarily a bad thing. However, as an asset management club, it's a little lacking.

In the second half of 2026, the market will put us to the test again. It may be a period of calm waves, or it may suddenly surge. At that time, the club will not be judged on the beauty of its materials or the abundance of memorable quotes. It will be on whether each member can articulate their reasons in their own words. Instructor Iwata's role is not to provide answers, but to cultivate the ability to reason. The members' role is to open the account after the applause, and to align daytime discussions with nighttime actions. It is only in this unassuming back-and-forth movement that one can truly feel the essence of "co-creation."

I hope this issue doesn't end as a pleasant read, but leaves you with a slightly uncomfortable question. Because discomfort is often a harbinger of growth.

Published by: Co-creation Asset Management Club Editorial Department / Supervised by: Seiichi Iwata

Images: Uses the club's official logo and instructor profile photos.

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