Gambling with 2023 NISA allowance?

[mikele3]

I haven't invested into NISA yet this year... I guess I am trying to time the market ... I know... I know...

My plan was to buy the full allowance into eMaxi slim all countries... but now I am having a though:
.. what if the US stock really crash and capitulate into recession...
wouldn't it make more sense to bet on volatility and buy (let's say at a ~25% cheaper than now) a Nasdaq or S&P500 ETF of sort, hoping to at least double the money tax free in the next 5 years?

Has anybody thought of this?

[zeroshiki]

If you can see the future, there's better things to do with your money than buying ETFs. You could fly to Macau and bet it on black, for one.

[sutebayashi]

US stocks could crash a 25% easily, but why would they do that?
Would they do that if the FOMC hikes short term rates to say, more than 6%? Maybe.
But if they did that, wouldn’t the dollar strengthen? Probably.
But if the dollar strengthens then your yen won’t buy as much toshin as it would otherwise.
And if stocks crashed, wouldn’t that make speculators bearish on the US economy and weaken the currency? Yeah maybe…

It’s a dogs lunch!

For NISA, I’d split my purchases up across months and forget about it. It’s only 1.2 million yen right? Chances of timing a purchase perfectly are pretty low to zero, and there is only 5 years for this thing to go, and if the battle with inflation and Putin etc lasts a while, doubling in 5 years might not be possible anyway. If you DCA with purchases across months, you’ll average in. Yeah you could hold it back until later in the year… I had similar thoughts when the pandemic struck, but stocks rebounded in like 1 month rather than 6. Great idea that was Who knows, there might be a Santa rally this year, and new lows next year. DCA will put you on autopilot.

For my legacy NISA, my plan is to shift it into the new NISA as they roll off, so even if a Nisa does lose money in the next 5 years, I’ll expect to make money in the next 10-15.

Not for NISA probably, but I do want to buy a nasdaq ETF - when the FOMC starts to cut rates. But I don’t imagine that’s going to be a 2023 story. But maybe it will be I will do all my speculation outside of a tax free account; I’d just go slow and steady with the tax free allocations.

[Gulliver]

My plan was to buy the full allowance into eMaxi slim all countries... but now I am having a though:
.. what if the US stock really crash and capitulate into recession...
wouldn't it make more sense to bet on volatility and buy (let's say at a ~25% cheaper than now) a Nasdaq or S&P500 ETF of sort, hoping to at least double the money tax free in the next 5 years?

When the US sneezes the rest of the world catches a cold.

If US stocks fall another 25% the knee jerk from the rest of the world will be even more extreme and global equities could do even worse, So if you’re looking to go bargain hunting eMaxis All Country might be a better bet anyway. You may be on to something with the NASDAQ though.

[beanhead]

I thought I would be a bit clever and gamble with some of those eMaxis Neo funds in the NISA for me and Mrs BH.
Results so far have been poor.
Plan right now is to sell any 'losers' at the end of this year to help fund next year's NISA. Amounts are small (I am an idiot, but not a complete idiot).

Conversely, my 'gambling' on individual Japanese stocks has been rather successful so far. I seem to have been lucky enough to pick up a few at low prices and seen good growth in just a few years. Risky, I know, but so far the Japanese banks and dividend favorites have been good to me.

[mikele3]

If you can see the future, there's better things to do with your money than buying ETFs. You could fly to Macau and bet it on black, for one.

I have been doing that in Las Vegas at least once a year for the past 15 (but 2020 and 2021 unfortunately) with mixed results financially, but I always had a wonderful time.

But if they did that, wouldn’t the dollar strengthen? Probably.
But if the dollar strengthens then your yen won’t buy as much toshin as it would otherwise.

Yep, that's why last year I learned how to buy USD in Rakuten and Prestia.. that worked well... I got in and out quite decently.
I am trying my luck with it again.

My reasoning is that, in any case, I am looking at the marked always priced in USD... for me, betting it'll go lower, means lower in USD terms.. so it make sense to hold USD while I wait... unless something drastically change (and it might) stronger dollar means everything else is cheaper, including JPY ... so .. yeah.. I wait in USD

When the US sneezes the rest of the world catches a cold.

If US stocks fall another 25% the knee jerk from the rest of the world will be even more extreme and global equities could do even worse, So if you’re looking to go bargain hunting eMaxis All Country might be a better bet anyway. You may be on to something with the NASDAQ though.

Interesting thoughts... though, eMaxis All Country did hold its value pretty well, compared to the S&P500 and the NASDAQ at least...

Conversely, my 'gambling' on individual Japanese stocks has been rather successful so far. I seem to have been lucky enough to pick up a few at low prices and seen good growth in just a few years. Risky, I know, but so far the Japanese banks and dividend favorites have been good to me.

nice!

[Gulliver]

When the US sneezes the rest of the world catches a cold.

If US stocks fall another 25% the knee jerk from the rest of the world will be even more extreme and global equities could do even worse, So if you’re looking to go bargain hunting eMaxis All Country might be a better bet anyway. You may be on to something with the NASDAQ though.

Interesting thoughts... though, eMaxis All Country did hold its value pretty well, compared to the S&P500 and the NASDAQ at least...

The point I was trying to make was not necessarily about that particular fund but that once the S&P 500 drops another 25% it would be simple enough to check all of the major index funds to determine the best value (which might not be the S&P 500 or NASDAQ).

Or were you thinking of those specifically because of their rebound potential?

[mikele3]

Or were you thinking of those specifically because of their rebound potential?

Well, yes their rebound potential, but also, I do not really know any better...

I am keeping track of a few "big names" individual stocks, but I am a bit vary of taking that road, since I didn't do any research on fundamentals and such... and in all honesty I am far from being able to do such speculations...

I bought the idea of a low cost diversified index fund for long term savings (eMaxis All Country) ... but since a new, better, bigger and unexpected NISA is coming and we are still well in a bear market... I like to look at charts and I am entertained by macro narratives... I am tempted to get off my comfort zone and try something new.

[Gulliver]

Or were you thinking of those specifically because of their rebound potential?

Well, yes their rebound potential, but also, I do not really know any better...

I am keeping track of a few "big names" individual stocks, but I am a bit vary of taking that road, since I didn't do any research on fundamentals and such... and in all honesty I am far from being able to do such speculations...

I bought the idea of a low cost diversified index fund for long term savings (eMaxis All Country) ... but since a new, better, bigger and unexpected NISA is coming and we are still well in a bear market... I like to look at charts and I am entertained by macro narratives... I am tempted to get off my comfort zone and try something new.

In that case, words to the wise, for this type of speculation only use discretionary funds- i.e money not needed for living expenses, retirement savings and emergency fund.

[sutebayashi]

Yep, that's why last year I learned how to buy USD in Rakuten and Prestia.. that worked well... I got in and out quite decently.
I am trying my luck with it again.

If you already have dollars and plan to use those dollars then yes that makes it sound more attractive.
I have not bought US ETFs with NISA before but I suppose they must mark to market the ETF purchase cost from USD to JPY to make sure it’s within your NISA limit.

(An aside but I started my currency speculation career with Prestia too, but use forex brokers for that almost exclusively now, since the spreads are thin. Speculating in currencies can often go wrong though)

I like the odds of higher FOMC rates and thus lower tech stocks, plus the inverted yield curve has a good record of predicting recessions so a goodly lower stock market later in the year seems like it could be on the cards.

In your exit strategy, if you can deal with the potential for the money to be worth less in 5 years, then it seems like a reasonable gamble to me. Like Gulliver said.

Then again, buying the NASDAQ say would concentrate your 2023 NISA in tech, whereas would you really be unhappy with whatever world stocks return over the five years? Maybe your itch might be satisfied by a smaller gamble than the whole 1.2 million yen worth.