research progresses..... questions about ideco/nisa/other investing

[tense-eye-man]

hi all,

so, we've been doing some reading (millionaire teacher, takegawa 確定拠出年金 and はじめての投資信託） and have the application packs for SBI and Rakuten Ideco.

Millionaire teacher says: index funds, balanced between bonds and stocks - ok, I think we understand that.

It seems hard to choose between SBI and Rakuten, SBI has more products to choose from but when looking at low-cost index funds it seems the choice is not so broad, and on a more practical level Rakuten booklets and website are more user friendly (so easier for us newbies) so I think that's the direction we'll go in. We'll both do rakuten so we'll be able to talk to each other about what we are seeing on our respective accounts - having to learn 2 websites and try to translate between them seems like adding unnecessary complications.....

According to millionaire teacher we want index funds, according to takegawa the 手数料 makes a big difference so going for the low cost index, rakuten has a vanguard 国内 and 国外　株式 funds - i read good things about vanguard and those happen to have the lowest 手数料 so that's easy.
So:
国内債権：たわらノーロード国内債券 (0.162%)
海外債権:　たわらノーロード先進国債権　(0.216%) - but: QUESTION 1: do we want the 為替えヘッジ or not? I don't understand the difference, 手数料 seems to be the same either way
国内株式：楽天バンガード (0.2396%)
海外株式：楽天バンガード　（0.1696%)

QUESTION 2:
wonderwife has been reading on the internet and apparently since ideco and nisa are tax free it's worth biasing for profit (ie stocks) in these (presumably we'd have more bonds in our normal investment account). Couch potato would be 50/50, our age in bonds would be about 40/60 (I'm 43, wonderwife is 40) or we could push to 20/80 in nisa and ideco and then have a more balanced normal investment account. Does this make sense, or should we go with the 40/60 for ideco as well as other accounts?

QUESTION 3:
How and where do we apply for a normal investment account? and should we get one account or 2 - one each (presumably putting equal into each, with the same stock/bond ratio)

thanks for any replies, was feeling a bit overwhelmed but having done some reading and with the application materials in front of us we think we are getting somewhere....

[Dan]

Q1 - I would go for the funds without currency hedge.
Q2 - agree with your Wonderwife. You would also need to consider how much exposure you want to allocate to global markets and to the Japanese market.
Q3 - the most common step would be to open a regular investment account with a brokerage first and then set up NISA and iDeCo. It would probably be good to look into setting up a Rakuten Bank or SBI Sumishin Bank account to be able to deposit money easily into the investment account. You should be able to open the bank account at the same time as you open the regular investment account.

After opening the regular investment account with a brokerage, you would still be allowed to open new investment accounts with other brokerages if you wanted to do that.

[Akatani]

海外株式：楽天バンガード　（0.1696%) <=== that's a US market only, eh. Funds that track msci kokusai for example, cover all the developed countries which would diversify your holdings. Just throwing that out there.

The books say to put your age into bonds...but look at what you get from bonds these days. If you want safety, cash is a similar option.
Bonds also went down along with stocks in this recent correction, when traditionally bonds go up when stocks go down.

[RetireJapan]

It seems hard to choose between SBI and Rakuten

I don't think there is much in this anymore after Rakuten matched SBI's cheaper fees last year. I use Rakuten

do we want the 為替えヘッジ or not? I don't understand the difference

Foreign currency hedging is a kind of insurance against exchange rate movement. I tend to avoid it as it is an extra expense and the stock market can move in your favour as well as against it.

wonderwife has been reading on the internet and apparently since ideco and nisa are tax free it's worth biasing for profit (ie stocks) in these

I would say this is more true of iDeCo which is more long-term. For a five-year iDeCo, putting higher-yielding bonds and dividend stocks in there allows you to receive dividends tax-free. Both approaches can make sense though

How and where do we apply for a normal investment account?

You'll need one to open NISA so the easiest thing is to apply for everything at the same time with one of the online brokers.

Keep going! You're on the right track

[tense-eye-man]

thanks for the replies!

rakuten seems good to me, no one seems to think that's a bad idea so we'll go with it.

I didn't realize I'd need a broker (is this the right word?) account to open the NISA (ideco we can do without I think, since we have the application forms already) but if it's easier to start with the broker account then that's what we'll do. Do we just go here https://www.rakuten-sec.co.jp/web/fund/index2.html click "簡単モード”　（newbies だから！） 、　click 口座開設　and go from there? and this would be to make a 楽天証券総合口座？　which in english would be "rakuten broker account"? I confess we haven't managed to look into NISA yet, tho we have a book about it from the library (takegawa-san again!) which is next on the reading list.

Also, if we also open a rakuten bank account we'd need to furikomi money from our regular bank account (that our salaries get paid into) - that will cost a 手数料 each time won't it? The rakuten ideco application form we have seems to be 引き落とし which has no 手数料, so that would seem to be the cheaper way to go, at least for ideco.

thanks again for all the help!

[Akatani]

SBI has free furikomi from a post office account. That's what I use. I can do it all online so while I have a decent amount in there to cover the automatic ideco contributions, I can easily add a bunch for special purchases.
For example, in this current correction, it went down a bunch on the first day, so that night I transferred some money to SBI, then the next day when it dropped even more, I bought some 1550 with my NISA allocation.

[RetireJapan]

thanks for the replies!

rakuten seems good to me, no one seems to think that's a bad idea so we'll go with it.

I didn't realize I'd need a broker (is this the right word?) account to open the NISA (ideco we can do without I think, since we have the application forms already) but if it's easier to start with the broker account then that's what we'll do. Do we just go here https://www.rakuten-sec.co.jp/web/fund/index2.html click "簡単モード”　（newbies だから！） 、　click 口座開設　and go from there? and this would be to make a 楽天証券総合口座？　which in english would be "rakuten broker account"? I confess we haven't managed to look into NISA yet, tho we have a book about it from the library (takegawa-san again!) which is next on the reading list.

Also, if we also open a rakuten bank account we'd need to furikomi money from our regular bank account (that our salaries get paid into) - that will cost a 手数料 each time won't it? The rakuten ideco application form we have seems to be 引き落とし which has no 手数料, so that would seem to be the cheaper way to go, at least for ideco.

thanks again for all the help!

You should be able to open a NISA account within the same application.

If you open a Rakuten Bank account they can take money from it instantly for free. I just use my regular Shinsei Bank account and do a free transfer.

[Dan]

Another option would be to deposit money into your account by doing it by hand at an ATM of a convenience store. It should be possible to do it for free at a nearby 7-11 although I am not sure if you can do it at other convenience store chains.

[tense-eye-man]

ok thanks, will look into all of that!