The Nikkei Average fell sharply on 22 October 2026, highlighting its concentration in 3 constituents. The article argues that investors should consider diversifying across assets and regions going forward.
In the Tokyo market on 22 October 2026, the Nikkei Average closed at ¥62,907.84, down ¥1,713.40 from the previous day, with semiconductor and AI-related stocks having a major impact. For individuals making regular investments through the new NISA, a decline in portfolio value can be unsettling, but over the long term, market downturns may also present opportunities from a dollar-cost averaging perspective.
Unlike the TOPIX, the Nikkei Average has a high concentration among its constituents and in recent years has been particularly susceptible to the influence of semiconductor and AI-related stocks. The 3 constituents accounting for approximately 30% of the Nikkei Average are Advantest, Tokyo Electron and SoftBank Group, which together make up approximately 29% of the index.
Against this backdrop of concentration among constituents, the importance of asset allocation, including assets other than equities, is being emphasized alongside regional diversification within equities as a means of spreading risk. A combination of global equity funds and TOPIX-linked funds is considered effective for people with larger amounts of money earmarked for long-term use, while deposits, government bonds and other liquid instruments are suggested for short-term funds.
The conclusion is that investors should not fear a decline in the Nikkei Average excessively, but should consider it together with the concentration of the index's constituents, the diversification of their own assets and when the money will be needed.