Selling Old NISA; Buying New NISA

[eyeswideshut]

Hi everyone,

I had a random shower thought: As soon as 2024 rolls in I plan to sell all my assets in my 2019 NISA (about 2.2 million worth of emaxis slim all country) and rebuy the same into the new NISA - topping up to the 2.4 million limit. Then it hit me like a flash - every other punter out there is likely going to do the same thing! I then wondered if all of this mass selling and rebuying going to create aberrations in the fund price? I wonder if it might be better to DCA out and back in over time or hold off until in the initial storm of selling and buying has passed.

I don't know how liquid these funds are and how they set prices. I also have no idea how much money will be coming out of the 2019 NISAs in aggregate but I imagine it is a lot.

Is this a real worry or am i being paranoid? Can somebody smarter than me weigh in and convince me that I don't need to worry about it.

[RetireJapan]

Well, there are only about 20m NISA accounts in total, and we can assume a lot of them are dormant.

People opening new ones are going to be putting new money in.

So I doubt there will be enough volume to make a difference.

But you could always do it a couple of days later if you're worried

[Tsumitate Wrestler]

funds

Well, there are only about 20m NISA accounts in total, and we can assume a lot of them are dormant.

People opening new ones are going to be putting new money in.

So I doubt there will be enough volume to make a difference.

Low-volume, low-market cap domestic stocks? Possibly

Everything else? No

[eyeswideshut]

Well, there are only about 20m NISA accounts in total, and we can assume a lot of them are dormant.

People opening new ones are going to be putting new money in.

So I doubt there will be enough volume to make a difference.

But you could always do it a couple of days later if you're worried

Thanks - I suspect you are right but I am still concerned as there is no limit orders with these index funds so it will just sell at whatever the going rate is that day. I might monitor it for a bit and see how it plays out before placing my orders.

[sutebayashi]

I am thinking so long as you arrange your toshin sell orders and buy orders on the same day, then your sale and purchase prices should be the same.

To do this, one will need cash in the account sufficient to purchase the buy order though. Using a staggered approach would be a way to migrate in smaller chunks, if one does not have sufficient cash on hand.

[eyeswideshut]

I am thinking so long as you arrange your toshin sell orders and buy orders on the same day, then your sale and purchase prices should be the same.

To do this, one will need cash in the account sufficient to purchase the buy order though. Using a staggered approach would be a way to migrate in smaller chunks, if one does not have sufficient cash on hand.

That is a great idea. Thanks! Are the spot prices set only once daily then?

[sutebayashi]

Are the spot prices set only once daily then?

Not sure the “spot” terminology is correct, but that’s the correct idea.

Say you put your Toshin buy / sell order in before 3pm one day, then your actual transaction price will typically be fixed on the next day.

This is described in the documents for the fund, because it is different depending on the assets being invested in, but yes I believe there is only one trade price per day, per fund, and it should be the same price for buying and selling, per memory.