New NISA strategy -GO!

[sutebayashi]

I am thinking I’ll sell tokutei investments in the early new year to tax protect in new NISA.

The investment is already there so splitting it over monthly would just be a hassle, and the averaging out would offset the averaging in, more or less?

Ideally, I want to sell a less profitable position to minimize taxes though… but meh, any tax due will be in spring 2025 so long as I sell in early 2024.
There should be a good bit of internally reinvested dividends accumulated for any stock fund I might sell, so just selling early in the new year and purchasing in new nisa seems simple and effective.

If I have cash to invest, I think I would already have it invested by the end of this year anyway, no big deal about paying a bit of tax on any profits for me.

[Roger Van Zant]

As I can only fill in 100k new investments to nisa each months I wonder if should I bother doing the sell regular - buy growth nisa ritual every month (200k x 12) or just do it in one go in january (2.4M x1)...

Heck, does it even count as DCA when it's just moving between investment accounts

I'm not sure it is worth selling investments that are still tax shielded in a legacy NISA account in order to fund a New NISA account.

New money into New NISA? YES
Sell investments in taxable accounts, move to New NISA? Maybe, likely yes for many people.
Sell investments coming out of legacy NISA accounts, move to New NISA? Sure.
Sell investments in legacy NISA accounts, move to New NISA? Don't see a reason to do this.

Anyone else?

I also cannot get my head around selling investments in legacy NISA/tsumitata NISA accounts just to move them to the New NISA.
Glad I'm not the only one; thought I was missing something.

[goran]

This person says that filling up the New NISA quickly (within 5 years) might not be the correct strategy and that putting in anything over 150k JPY per month doesn't yield significantly higher return. I think he also says that it might actually be a riskier choice.

https://youtu.be/Zw_bGVyTLPg?si=YI0w7m9403K2ocpP
(Watch from around 3:00)

I don't know if I agree with him completely. But what do the learned minds of RJ think about this advice?

[adamu]

This person says that filling up the New NISA quickly (within 5 years) might not be the correct strategy

The video seems to be mostly clickbait and largely irrelevant, because it only applies to people who wouldn't have otherwise invested the money. You shouldn't invest money in the NISA if you weren't planning to invest it anyway, and if you are planning on investing then you should make the fullest use of of the available tax-protected accounts before investing in taxable accounts.

Additionally, while he says maxing out ASAP "only" generates an extra 7% (about ¥3M) if the interest rate was 3%, if the interest turned out to be, say 7% instead of 3% the difference of ¥300k/mo over ¥150k/mo is ~19% or ~¥29M extra for the same ¥18M invested over 40 years.

[goran]

This person says that filling up the New NISA quickly (within 5 years) might not be the correct strategy

The video seems to be mostly clickbait and largely irrelevant, because it only applies to people who wouldn't have otherwise invested the money. You shouldn't invest money in the NISA if you weren't planning to invest it anyway, and if you are planning on investing then you should make the fullest use of of the available tax-protected accounts before investing in taxable accounts.

Additionally, while he says maxing out ASAP "only" generates an extra 7% (about ¥3M) if the interest rate was 3%, if the interest turned out to be, say 7% instead of 3% the difference of ¥30k/mo over ¥15k/mo is ~19% or ~¥29M extra for the same ¥18M invested over 40 years.

And also his comment regarding longer time in the market results to higher risk goes against the saying "time in the market beats timing the market"

[adamu]

Made a typo in the calculation above, the monthly investments were an order of magnitude too small Fixed now.

[adamu]

I wonder if everyone selling off ¥2.4M of taxable investments at the same time will be enough to affect the price. If so, just after that but before everyone puts their NISA buy orders in would be the best time to buy in

However, for the majority, just setting up monthly investments of up to ¥300k/mo is the way to go.

I guess you could try to lump-sum the growth portion every January, but I still think unless you do it on a strict schedule, that will lead to attempting to time the market, so the monthly contribution route is better.

[northSaver]

I wonder if everyone selling off ¥2.4M of taxable investments at the same time will be enough to affect the price. If so, just after that but before everyone puts their NISA buy orders in would be the best time to buy in

Yeah, I was wondering that too. If so, January could be a volatile month for Japanese MFs and, by extension, world stock markets!

[sutebayashi]

Haha, well good luck timing the markets!

If dealing with mutual funds that invest in overseas assets it would seem to be difficult. The trade date for a foreign asset mutual fund is typically the business day after you put in your order by 3pm local, so anything can happen in the interim.

If I were trying to sell and buy, I would go about it with spare cash, so as to be able to put in my NISA buy orders on the same date as the sell orders (in theory I assume this should be pretty close to the desired effect, but people with accounts having tax deducted at the source will have that extra complication.)
If not having 2.4 million of cash handy, I would probably break it into smaller transactions accordingly.

Actually some inflation-related advice I think I saw from Tomoya Asakura was to put yen one has now into something like eMAXIS slim foreign developed bond fund, and then sell that to fund purchases of growthier assets in NISA next year.

I guess the first trade date for NISA 2024 should be circa December 28th perhaps?

Me think it might be hard to discern any impacts in the market action. Too many different things going on as it is, and even the NISA investors will be doing things on different schedules.

[goran]

So, after going through all the posts in this thread and looking at my assets right now, here's my thinking:

I won't have enough new money to fill the next year's NISA allocation of 3.6M JPY completely.
So, I am thinking of selling all my following Taxable accounts holdings, and dumping everything onto emaxis slim all country in addition to some new money.

I will keep my current NISA assets as it is.
Let me know if I am grossly over-looking something, or if something doesn't make sense at all.
I purchased these when I did not know much about investment (which was quite recent, and I still don't know much about it ) and was only trying my hands around different stuffs.

特定 Account:

iシェアーズ　米国株式（Ｓ＆Ｐ500）インデックス・ファンド　　
less than 1M JPY; about 22% up

ｅＭＡＸＩＳ Ｓｌｉｍ 米国株式（Ｓ＆Ｐ５００）
less than 100k JPY; about 35% up

eMAXIS Slim 先進国リートインデックス　　　　　　　　　　　　
less than 100k JPY; about 3% down

META
less than 150k JPY; about 77% up