done ideco and NISA, what next?

[tense-eye-man]

Hi again,

had a bit of a break in working on financial stuff due to a couple of life complications that came up (all sorted now, and nothing disasterous, mostly just hassle....) , but we did manage to get our nisa arrangements squared away (err, nearly....there's a complication involving my name in katakana but that's the last hurdle I think).

So the next question is what to do with extra money - we probably don't have a huge amount left over after nisa and ideco on a monthly basis, but there is a bit (perhaps a little more if my side-gig gains some traction) and we do have a couple of lump sums that we want to get working for us. My understanding is that the options are either a robo-advisor (theo? raku-wrap?) which would be simple but with higher fees, or else a normal broker account if we don't mind having a look at funds and choosing, which I think we are starting to feel slightly more comfortable with - the basic plan is to invest any extra we have in an index fund or two, hopefully including developing markets (bigger risk higher returns, if i understand correctly)., however looking over the Rakuten site (just because that's where our nisa and ideco are - keeping things simple!) it really wasn't clear to me what to do next, or even which bit of the site i should be looking at. ..

can anyone provide any pointers? thanks!

[RetireJapan]

The thing I would recommend is to check whether you have a tax-reporting account (特定口座). You can see this in the settings page. Just click on 特定口座.

Should look something like this:

https://ibb.co/bQ5hYJ

[tense-eye-man]

thanks for the reply, just looked and yes that is exactly what I have

[adamu]

https://ibb.co/bQ5hYJ

Just a pointer: On that site, if you click the "embedded codes" tab, you can get the code for including the image directly on the forum. You want the BB code one, then it turns out like this:

[RetireJapan]

Thanks! Tried that, didn't work for some reason. I'll try again next time

[RetireJapan]

thanks for the reply, just looked and yes that is exactly what I have

Next would be to decide what you want to buy: mutual funds or ETFs, and what kind.

[tense-eye-man]

ok thanks! will do a bit of research on those and get back to you!

[tense-eye-man]

Ok, finally got around to gooooogling mutual funds and ETFs....

From what I understand (which isn't much....):
Mutual funds are mostly active (and therefore fees are higher), trade once a day, and have a minimum investment but you don't have to buy whole shares
ETFs are mostly passive (and therefore fees are lower), can be traded during the day, and don't have a minimum investment but you do have to buy whole shares

I'm not sure I'm too much the wiser for my reading, but I guess I'm tending towards ETF for being passive with low fees (however I'm open to other suggesting). As for what kind.....um, I guess I'd need to look at the individual options and make a choice from there (I'm assuming it's like NISA and ideco, there'll be a bunch of funds and I choose the ones I like)

As ever, I'm not really looking to optimise so much as figure out what to do that is sensibly "good enough" (or even just something that is "better than nothing") - I don't really enjoy learning about this stuff but I do recognise the need to provide security for my wife and I's future selves....

thanks for any further comments or suggestions!

[adamu]

From what I understand (which isn't much....):
Mutual funds are mostly active (and therefore fees are higher), trade once a day, and have a minimum investment but you don't have to buy whole shares
ETFs are mostly passive (and therefore fees are lower), can be traded during the day, and don't have a minimum investment but you do have to buy whole shares

I'm not sure I'm too much the wiser for my reading, but I guess I'm tending towards ETF for being passive with low fees

What you said about the timing and minimum investment is correct, but what you said about active/passive is incorrect. There are probably much better guides around than my explanation but I'll have a go.

Mutual Funds and ETFs can both be active or passive. The only difference is how you buy them.

If you wanted, you could just buy stocks directly at a stock broker.

A mutual fund is a fund set up by someone that buys up lots of stocks and shares the proportions mutually between the fund's investors. To buy into a mutual fund, you ask a stock broker to sign you up. You're effectively buying the right to a portion of the fund's worth, minus fees. The benefit of a fund over individual stocks is that you can invest into much more diversified markets than you could buy yourself - for example a fund of every publicly listed stock in the world.

An ETF (Exchange Traded Fund) is just a mutual fund that is traded on the stock market, instead of contracting directly with the provider.

For long-term investments, I don't think it really matters which one you go for, as long as the underlying investment fits your objectives. One downside of ETFs is that you have to pay trading fees to buy and sell them. So for regular investments, maybe investing in a fund directly is better. Some brokers even have regular investment schemes for mutual funds that invests the same amount every month.

If you're happy with what's in your NISA or iDeCo, why not just buy more of the same?

[tense-eye-man]

If you're happy with what's in your NISA or iDeCo, why not just buy more of the same?

that sounds completely sensible, yes I think that is what I will do!

So, um, back to very very newbie questions: how do I go about doing that? (on the rakuten site, it seems like I can keep things simpler by doing it all via rakuten)