Finally getting started - need a bit of help.

[goodandbadjapan]

I have finally got my SBI account up and functioning, name issues sorted and have successfully put a little money into my account. At the moment I am really just playing around as I get used to the interface and I have a couple of idiot's questions.

I bought a bit of 1550 and 1348, and then thought I would have a look at bonds. Now here's my idiot question - how do you actually buy them? For the stocks you have the codes and so just going to the 取引 screen typing them in and choosing how many units to buy and clicking Nisa is enough.But do bonds have these codes (couldn't see them) and if not what do you need to do to buy them?

Also - I bought the two I mentioned above and my money has gone down appropriately so I think I did it right, but when should my purchases show up in my portfolio? I presume it takes a day or two to show up.

Hope someone is kind enough to help. If not, perhaps I have helped another newbie to gain confidence by realising there is someone out there who knows even less than they do!

[N00bster]

What you bought with 1550 and 1348 are ETFs of stocks. There exist equivalent ETFs for bonds (look for instance 2510 for Japanese bonds).

But what you probably want to do is get a regular fund (投信) of bonds. They trade differently from ETFs, so they are probably in another section of the SBI website (on Rakuten you have to specifically search for them). You will have more choice with funds - a few examples to look up:

たわらノーロード　先進国債券
たわらノーロード　国内債券
eMAXISSlim先進国債券ｲﾝﾃﾞｯｸｽ
ｅＭＡＸＩＳＳｌｉｍ国内債券インデックス

Someone who is using SBI can probably point to more precisely.

[goodandbadjapan]

Thanks NOObster. Yes, I can find the bonds okay (or some anyway) but just don't seem to be able to figure out how to actually buy them! I'm probably just being impatient as I have only had the account up and running since today and am busy trying to navigate my way around it! Still, if anyone using SBI has any pointers, I would be very grateful!

Edited to add - I think after a bit more messing around I have figured it out. Haven't bought them yet so not 100% sure but I think I just have to click the link on the bond page and read through a bunch of rules etc before I can buy. Sound about right?

[adamu]

Before the stocks you bought show up you can check the in-progress orders here:

取引→国内株式→注文反映

As N00bster said, sounds like you've worked out how to buy stocks and ETFS on the stock exchange.

To buy domestically domiciled (domiciled but can be international investment) funds directly, rather than via the stock exchange, (including bond funds) it's
取引→投資信託→search→金額買付

I've never actually bought bonds directly (via the 債券 screen). I admit I've not taken the time to sit and read through it and understand it. I've only ever bought funds of bonds. That way it's much easier to buy a diverse pot, and not worry about maturity dates etc., rather than buying an individual bond. Personally I bought the US ETF called BND (and BNDX), but if I was doing it now I would get a domestic fund instead because of exchange rate and tax reasons.

Item added to TODO list: Understand SBI's bonds marketed for individual investors screen.

[goodandbadjapan]

Thanks adamu. I think I have figured out how to buy bond funds through SBI. I bought some then cancelled as I hadn't bought in NISA by mistake. But that leads me to a follow up question before I buy again.If you can afford to max out your Nisa and add a bit extra in a tokutei account, would it be more sensible to add the bond section of your portfolio to the tokutei account as they (I think) are less likely to make significant gains than stocks?

[N00bster]

Edited to add - I think after a bit more messing around I have figured it out. Haven't bought them yet so not 100% sure but I think I just have to click the link on the bond page and read through a bunch of rules etc before I can buy. Sound about right?

Looks so - it is customary to have to agree to a fund contract before being able to buy it. At least that's what I had to do before I could buy mine.

Be also aware than contrary to ETFs, funds are traded once a day and it can take up to a week until they show up in your account. This also means you don't always know the exact price you will pay for it since the transaction will take place later during the day (or even the next day). I have come to regard this as a good thing, as it discourages you to try and time the market.

If you can afford to max out your Nisa and add a bit extra in a tokutei account, would it be more sensible to add the bond section of your portfolio to the tokutei account as they (I think) are less likely to make significant gains than stocks?

I think the correct way of looking at this is in term of tax-efficiency. Quote from Bogleheads:

Some fund types, like total market equity index funds, are extremely tax-efficient, because they produce very low dividends and capital gains. By contrast, bond funds can be extremely tax-inefficient, because the interest they produce every year is taxed at your full marginal tax rate. So Bogleheads put tax-inefficient funds ( bonds) into tax-advantaged accounts. Other tax-inefficient funds that should usually go in tax-advantaged accounts are REITs, small value funds, and actively managed funds that frequently churn their holdings. If there's not enough room for bonds in tax-advantaged accounts, and you are in a higher tax bracket, holding tax-exempt municipal bond funds in a taxable account may be a good choice.

Bonds tend to have a higher yield than stocks, which makes then good candidates for tax-advantaged accounts like NISA. They are also less likely to make significant gains, yes - but they are also less likely to generates losses, and contrary to a tokutei account you cannot report your NISA losses against other capital gains. In other words, you keep 100% of the gains on a NISA, but you also assume 100% of the losses.

So at the end of the day it is up to you to do your own math, but having yield-generating funds on a NISA account also makes sense.

[goodandbadjapan]

Thanks again - that's very useful info. I still have a lot of reading to do and until I know more am just treading gently with some heavily recommended funds and putting them all in my NISA until I have no more room.