When do we think we should do a Lump sum investment?

[RMA]

AWESOME! ... have been trying to find a ticker to use in TradingView for the eMaxi slim all counties ... not the ETF version though.

Is this why the price for it is ¥13,530 on TradingView and ¥15,993 here: https://finance.yahoo.co.jp/quote/0331418A ?


Also, interesting approach... I'll need a little time to wrap my head around it... I was planning to simply go in by 50% of what available when I believe the bottom is in and start DCA from there.... then 50% on each following large drops, if any. ... time to rethink and improve.

emaxis slim all country MF is not available on Tradingview but you can see its chart on investing.com by using symbol - 0P0001EVK2.

The main reason of the difference in price of ETF (2559) and MF (0P0001EVK2) should be because of the dividends distribution vs reinvestment.

[RMA]

1. Put ticker 2559 (emaxis all country ETF) in tradingview

Is this ETF and what we do with (non ETF) emaxis all country for NISA and others same?
I would love to view the emaxis All country (non ETF) on a chart like tradingview.

use symbol - 0P0001EVK2 on investing.com to see the chart of emaxis slim all world equity (all country) MF.

[mikele3]

emaxis slim all country MF is not available on Tradingview but you can see its chart on investing.com by using symbol - 0P0001EVK2.

The main reason of the difference in price of ETF (2559) and MF (0P0001EVK2) should be because of the dividends distribution vs reinvestment.

Thanks again.
I'll keep the ETF in Tradingview for now, it might still come handy.
Upon your suggestion, I ditched the yahoo website for investing.com, the interface is much cleaner ... and in English

[mighty58]

Here is something I read on a Monday Read link a long time ago and it really struck a chord with me:

"Here's the plan I use with the cash in my portfolio:
When stocks fall 10% from a recent high, I invest half the cash in my portfolio.
When stocks fall 20% from a recent high, I invest half the remaining cash.
When stocks fall 30%, I invest the remaining cash.
Why those levels? In short, because we see 10% declines about once every year or two and 20% declines about once every five to seven years; a 30% decline has happened only six times in the past 70 years. Holding cash for bigger drops is a losing move since the market has always recovered far more than it lost before falling 30% or more again. Sure, it's possible we could see another 30% drop in the next year or less; it's that history says it's not a probability worth betting the farm on."

You can adjust the percentages for other markets too, like bonds (which don't fall as much as stocks usually). And sure, stocks may drop 50% from the high - who knows? - but I personally doubt it. Some smart investors I know are even predicting rate CUTS in the not too distance future!

This kind of plan has a certain appeal upon first read, a sort of backwards-looking logic to prescribe future actions. But dig deeper and a lot of issues become apparent. For one thing, how do you define "a recent high"? Do you just pick a point on the chart and call it "time zero"?
Another thing: what are the timespans? Daily falls? Weekly? Monthly? If you wait long enough, and pick an appropriate point on a chart, you can probably backwards-engineer your 10%, 20% falls. Or, conversely, you may never get them.
Which leads to the final point, what to do with your cash while waiting for these occurences? This strategy seems to imply sitting on large amounts of cash waiting for rare events to happen (30% fall only six times in the past 70 years). Is that really the best use of capital?

Bear strategies are extremely difficult to pull off, even for professional investors. They have a psychological appeal because it's the equivalent of a prepper, someone who's thought through consequences and appears to have a game plan. But what bear strategies neglect is the massive risk of missing the upside. Over the past 70 years, upside has been the one constant, not downsides. Sitting on the sidelines with cash waiting for rare events to occur, and hoping you are able to accurately call it and act in the moment, is a strategy almost certainly doomed to fail.

[northSaver]

mighty58, I think you are overcomplicating a very simple procedure...

For one thing, how do you define "a recent high"? Do you just pick a point on the chart and call it "time zero"?

The "recent high" is just the last high on the chart. In the case of the S&P it's about 4820 in Jan 2022.

Another thing: what are the timespans? Daily falls? Weekly? Monthly? If you wait long enough, and pick an appropriate point on a chart, you can probably backwards-engineer your 10%, 20% falls. Or, conversely, you may never get them.

The timespans are irrelevant. It's all about the levels. A 10% drop from 4820 is 4338. This was hit at the end of Jan. A 20% drop from 4820 is 3856. This was hit in May. A 30% drop from 4820 is 3374. This hasn't been hit yet (and probably won't be, since it's a rare event).
Every time there's a new high you just recalulate the levels and reset your pending orders to buy. Most of the time they won't get hit. But when the market finally corrects, like it's doing now, at least one of your orders should get filled.

Which leads to the final point, what to do with your cash while waiting for these occurences? This strategy seems to imply sitting on large amounts of cash waiting for rare events to happen (30% fall only six times in the past 70 years). Is that really the best use of capital?

You're right... it isn't the best use of capital. Personally I invest a fixed sum regularly each month no matter what the market is doing. But I do tend to accumulate cash over time, and having a certain amount of cash in your portfolio isn't such a bad thing in my opinion. Some portfolios even call for it, e.g. the Permanent Portfolio requires 25% of cash at all times.
So this stratgey is for people with spare cash savings, or for those who have received a lump sum recently and don't want to invest it all at once. But yeah, I get your point. Immediate lump sum vs DCA vs wait for a correction. It's a personal choice I guess, and very hard to get exactly right. I don't think we should worry about it too much.

[mighty58]

OK, I see now that you had in mind "all-time-high" when referring to "recent highs". That obviously would make it easier to mark a point from which to compare (and it's certainly been easy to do over the last decade as things have steadily gone up). I was imagining a scenario where volatility gets choppy somewhere below the all-time-high mark for an extended period of time... such as what we've been seeing these last few months, or what Japan's experienced for the better part of three decades for that matter. In those scenarios, "marking a point" just seemed arbitrary.

As for cash, I'm guessing most strategies calling for 25% in cash are from a bygone era. Keeping such large amounts in cash nowadays is akin to locking in losses.

[northSaver]

OK, I see now that you had in mind "all-time-high" when referring to "recent highs". That obviously would make it easier to mark a point from which to compare (and it's certainly been easy to do over the last decade as things have steadily gone up). I was imagining a scenario where volatility gets choppy somewhere below the all-time-high mark for an extended period of time... such as what we've been seeing these last few months, or what Japan's experienced for the better part of three decades for that matter. In those scenarios, "marking a point" just seemed arbitrary.

Yes, in a long period of going sideways (aka accumulation / distribution) you may be left wondering what to do with such a strategy. Personally I think I would buy some more every time it hit one of the levels to the downside... IF I had enough spare cash.

As for cash, I'm guessing most strategies calling for 25% in cash are from a bygone era. Keeping such large amounts in cash nowadays is akin to locking in losses.

The Permanent Portfolio with its 25% cash allocation intuitively looks crap, but it's not something you should write off so easily. This post (also from an old Monday Read - thanks Ben!) explains why:
https://assetbuilder.com/knowledge-cent ... allocation

Don't forget that high inflation usually leads to higher interest rates, which result in greater yield from cash. Risk-free too. Where else can you find decent yield these days? Even commodities are tanking.

Interesting discussion though, thanks.

[al3x_jp]

I have a large amount of cash at the moment, which I am DCAing into mutual funds. At the current rate of purchase (I do an order on Rakuten every time the previous order clears), it will take 15-20 months to be fully invested.

I plan to do a lump sum investment if markets fall considerably/the yen gets stronger/both.

So far that has not happened.

Is there a specific reason you top up every few days instead of once a month?

[RetireJapan]

Not really. I have a lot of cash to redeploy, and want to do it in medium-sized amounts.

Only takes a minute or so to do.

But yeah, there is absolutely no reason for me to do that!