What to do with spare 3 million yen

[ToushiTime]

Hi, this is a fairly open-ended question. I have about 3 million yen sitting idle in my Japanese bank account. I already have a NISA Tsumitate and IDECO account set up. I am thinking of buying precious metals, dollar MMFs, and more index funds. I will have a low to medium risk tolerance for this investment. I think I can do automatic payments in minimal increments of ¥5000 when buying dollar MMFs on SBI Securities. What about buying gold? Is there a function for buying that automatically each month? What are the minimum amounts for that?
Any other ideas?
I don’t want to invest it all in one go tomorrow but I don’t want to sit on it for any longer either.

[adamu]

Ideally, you should already have an asset allocation decided for your entire portfolio that reflects your risk tolerance. Invest it in line with that allocation.

[ToushiTime]

Okay, say I allocate 3 million yen from my asset portfolio, and use that for low to medium risk investments. Bearing in mind my questions above, what do you, or anyone else, recommend?

[TokyoBoglehead]

Okay, say I allocate 3 million yen from my asset portfolio, and use that for low to medium risk investments. Bearing in mind my questions above, what do you, or anyone else, recommend?

Low-Medium risk? Bonds - Buy US. treasuries or strips directly. The only risk is currency risk.

[adamu]

If it's "I want 3M yen to cover emergencies / upcoming expenses" or "I would really like some return from that 3M, but I don't want to lose any of it" then it's not really "spare" - just keep it in cash. That's the price of certainty.

Anything else and it's really a personal decision. All investments can go wrong, so there's no way to guarantee you won't lose money. Personally I just stick to cash and stocks (and some crypto, but I wouldn't recommend that ). Maybe it's burning a hole in your pocket and you should just allocate a portion of it to play with, and treat it as a learning experience when you lose it all.

[Bubblegun]

Hi, this is a fairly open-ended question. I have about 3 million yen sitting idle in my Japanese bank account. I already have a NISA Tsumitate and IDECO account set up. I am thinking of buying precious metals, dollar MMFs, and more index funds. I will have a low to medium risk tolerance for this investment. I think I can do automatic payments in minimal increments of ¥5000 when buying dollar MMFs on SBI Securities. What about buying gold? Is there a function for buying that automatically each month? What are the minimum amounts for that?
Any other ideas?
I don’t want to invest it all in one go tomorrow but I don’t want to sit on it for any longer either.

I was in a similar situation.
I had used up all the allocation for the T-NISA, and my ideco was set up but I can't be bothered going through the paper work to increase it.
So I decided to drop in 50,000 into the ETF every few days over the year. It works at at about 60 weeks.And if the market goes up, or down I can ride the rollercoaster. And that's where we am at the movement. We Pop it in the S&P500 fund, Nasdaq fund, and some crazy save the world from global warming fund.
But if you need some cash I'd keep some......just incase, the Aircon blows. and that's a real emergency now. :shock:So maybe it can give you peace of mind that you aren't dropping it all in one go, and can pause if need be.

[7-seasons.com]

Keep it in cash if it's an emergency fund. If the warning signs are correct, food and energy could become very scarce/expensive this winter.

If spare, probably won't like this answer, cash is a position. There isn't a clear confirmed new trend at the moment - looks like bitcoin/crypto may have bottomed, stocks may have bottomed, bonds look like they really have bottomed in terms of price but to be confirmed as well. If the bottom falls out in Sep/Oct, you'll want to have the cash on hand to invest.

And if you can't decide, you can always average in with monthly tsumitate positions until the money is all invested to avoid trying to time the whole investment.

[mighty58]

It is indeed an open-ended question, because it depends on your time horizon as well, and what this money is earmarked for.

If you don't foresee needing this money for at least 15-20 years, then a broad-based stock index fund is perhaps the lowest risk investment you can make. It's low risk because it's very diversified, and stocks tend to go up rather than down over long time periods. You will always be invested in the best companies in the world.

If you do foresee needing the money before then, then it gets harder, as trying to predict future market movements in the short term is a fool's game. It gets harder still if you want to preserve the capital at all costs. So if price volatility is not what you're looking for, AND you have a short-term horizon, then stay away from both equities and gold/precious metals, as both are very volatile and unpredictable over short time periods. As for bonds, they are not neccessarily low-risk, I would argue you have a high risk of losing money to inflation (because bond interest rates are lower than the inflation rate), but if you want to preserve that 3m balance at all costs, and are willing to sacrifice returns, you can buy individual bonds, which will at least give you certainty + a small coupon. A money-market fund can do the same, albeit with an even lower return.

[ToushiTime]

Thanks to everyone for the suggestions.
I don't have a short-term horizon.
I think I will go for dollar averaging over time and try to fill the gaps not covered by my IDECO and Tsumitate NISA, plus buy a few more index funds, and possibly US Treasuries, and even REITs.