What to buy with Junior NISA?

[beanhead]

Thank you for your answers! I generally agree 100% with those opinions, but I think this case is different because of the strong market timing effect of buying one single time and forget for many years.

This time is different?

You mention choosing an 'undervalued' fund. How do you define this? Who decides if the fund is overvalued or undervalued?

Most of the posters on this forum acknowledge that we don't know much about the future. If you have extra information, good luck with acting on that.

[alberto]

I said this case is different because it really is. It's not that something new is happening in the market, but the circumstances of the investment which is described in this thread are actually different. My normal investment process is not one single purchase that stays like that for years or decades. If you can average your purchase price with DCA, you can of course ignore everything else and buy a world index periodically, but what I described in this thread is just the opposite, it's pure market timing, regardless we like it or not.

About the price of a fund, nobody defines its fair price, but you can have an educated opinion, which can be right or wrong, and my opinion is that World index in JPY are overpriced at this specific moment, so if I have to go all in just now and cannot wait, is it weird to hesitate about a strategy designed for different circumstances and look for alternatives?

Thank you for your thoughts!

[RetireJapan]

I said this case is different because it really is. It's not that something new is happening in the market, but the circumstances of the investment which is described in this thread are actually different. My normal investment process is not one single purchase that stays like that for years or decades. If you can average your purchase price with DCA, you can of course ignore everything else and buy a world index periodically, but what I described in this thread is just the opposite, it's pure market timing, regardless we like it or not.

About the price of a fund, nobody defines its fair price, but you can have an educated opinion, which can be right or wrong, and my opinion is that World index in JPY are overpriced at this specific moment, so if I have to go all in just now and cannot wait, is it weird to hesitate about a strategy designed for different circumstances and look for alternatives?

Thank you for your thoughts!

I'm not sure any of this is actionable. We don't know the fair value of the world stock index (is it overpriced or just fairly priced?), we don't know how strong the yen will be in the future (will it strengthen again or just stay at this level -or drop further?), and we don't know how much the world index will grow in the future.

Same for any alternative investment you might buy.

For me the no brainer investment is world stocks, so any other investment has to be better for me to consider it.

[alberto]

If we basically don't know anything about anything, how can we know if other investment is "better" than World index?

[RetireJapan]

If we basically don't know anything about anything, how can we know if other investment is "better" than World index?

Well, my conclusion is that unless I strongly believe something is better, I just go with my default, which based on historical performance and logic (I believe the world economy will grow over time) is a world stock fund.

[TBS]

Please, check the MSCI World chart below. If you had done a single investment in the 2000 peak, you'd have had to wait for 13 years only to get back to the initial point.

The attachment MSCI 1.jpg is no longer available

Do those graphs account for dividends?

Yes, they account for dividends.

Hey, could you please check again? It looks like the top graph doesn't contain dividends - it is just the MSCI World price index.

Including dividends makes it look like this: 10 years for full recovery, and for about 3 of those 10 years (fall 2005 to fall 2008) it's actually up on the year 2000 peak.

[beanhead]

I was looking for old discussions about Junior NISA and found this one.

Price of the eMaxis Slim fund the day of the original post: 20,155
Price today: 25,962

[RetireJapan]

I was looking for old discussions about Junior NISA and found this one.

Price of the eMaxis Slim fund the day of the original post: 20,155
Price today: 25,962

That's what we like to see

My granddaughter's junior NISA is currently worth almost 8m yen. If she puts that into an adult NISA from the time she turns 18, she should have over 200m yen by the time she gets to retirement age.

Wish I had started earlier...

[adamu]

My granddaughter's junior NISA is currently worth almost 8m yen. If she puts that into an adult NISA from the time she turns 18, she should have over 200m yen by the time she gets to retirement age.

I wonder if a 75yo would pay ¥200m to give their 24yo self ¥8m to go and enjoy their youth.

[RetireJapan]

My granddaughter's junior NISA is currently worth almost 8m yen. If she puts that into an adult NISA from the time she turns 18, she should have over 200m yen by the time she gets to retirement age.

I wonder if a 75yo would pay ¥200m to give their 24yo self ¥8m to go and enjoy their youth.

That is very much a false dichotomy

(but also important! Think I'll write a blog post about this)