Is eMAXIS becoming too expensive to buy?

[trajan]

This year's return on the eMAXIS Slim 全世界株式 is already above 20% (which is great if you already own some).

However, is the price per share becoming too high to buy?

Jan 2023 ~16000 yen/share
Jan 2024 ~20000 yen/share
today ~27000 yen/share

Essentially, I am trying to understand why eMAXIS has grown so much (dollar/yen? NISA? bubble?) and what prospects you people think it has.

Is it still the forum's "go-to" fund? What are the sensible/conservative investors here doing?

The aim is long-term.

Thank you all.

[Tsumitate Wrestler]

This year's return on the eMAXIS Slim 全世界株式 is already above 20% (which is great if you already own some).

However, is the price per share becoming too high to buy?

Jan 2023 ~16000 yen/share
Jan 2024 ~20000 yen/share
today ~27000 yen/share

Essentially, I am trying to understand why eMAXIS has grown so much (dollar/yen? NISA? bubble?) and what prospects you people think it has.

Is it still the forum's "go-to" fund? What are the sensible/conservative investors here doing?

The aim is long-term.

Thank you all.

95% of this fund consists of non-Japanese stocks denominated in foreign currency. Not only has the market as a whole gone up, the yen has weakened, thus making those stocks denominated in foreign currencies more expensive.

I would not attempt to predict the trend, but always be prepared for a reversal.

What else would you be doing with your yen?

[trajan]

95% of this fund consists of non-Japanese stocks denominated in foreign currency. Not only has the market as a whole gone up, the yen has weakened, thus making those stocks denominated in foreign currencies more expensive.

I would not attempt to predict the trend, but always be prepared for a reversal.

What else would you be doing with your yen?

That's the question, isn't it?

Thanks for the quick reply, btw.

[RetireJapan]

This year's return on the eMAXIS Slim 全世界株式 is already above 20% (which is great if you already own some).

However, is the price per share becoming too high to buy?

Jan 2023 ~16000 yen/share
Jan 2024 ~20000 yen/share
today ~27000 yen/share

Essentially, I am trying to understand why eMAXIS has grown so much (dollar/yen? NISA? bubble?) and what prospects you people think it has.

Is it still the forum's "go-to" fund? What are the sensible/conservative investors here doing?

The aim is long-term.

Thank you all.

Two things have caused the yen price of this global fund to rise: the yen weakening so that non-yen assets in the fund are worth more in yen; and the contents of the fund have also gone up (mainly driven by a tiny number of US companies).

It is normal for stock markets to be at all time highs: they get there, pull back, then go onto a new high.

The particular risk for people in Japan is a strengthening yen: this would be bad for people who had a lot of their net worth in non-yen assets (like me) but good for people who are planning to use yen to invest in global markets going forward (also me).

Unless you need the money in yen in the near to mid-term future, I wouldn't worry about it. The growth of the stock market over decades should make up for currency movements in the short term.

If you will be needing the yen soon, then you have to think about how likely you think the yen is to strengthen, and how much you need the money.

[trajan]

Two things have caused the yen price of this global fund to rise: the yen weakening so that non-yen assets in the fund are worth more in yen; and the contents of the fund have also gone up (mainly driven by a tiny number of US companies).

It is normal for stock markets to be at all time highs: they get there, pull back, then go onto a new high.

The particular risk for people in Japan is a strengthening yen: this would be bad for people who had a lot of their net worth in non-yen assets (like me) but good for people who are planning to use yen to invest in global markets going forward (also me).

Unless you need the money in yen in the near to mid-term future, I wouldn't worry about it. The growth of the stock market over decades should make up for currency movements in the short term.

If you will be needing the yen soon, then you have to think about how likely you think the yen is to strengthen, and how much you need the money.

The explanation is appreciated.

Are you then still buying eMAXIS Slim 全世界株式 or are you skipping this "all-time high"?

[RetireJapan]

Are you then still buying eMAXIS Slim 全世界株式 or are you skipping this "all-time high"?

Every month! I am not clever or deluded enough to think I can beat the market, so a low-cost diversified global fund seems to be the best option.

(every time I have tried to be clever and time the market or the exchange rate, it went horribly wrong )

[TokyoWart]

I can't buy the eMaxis products (US taxpayer) but basically everything in my portfolio is at all-time highs. I would not be surprized if everything fell very substantially but I don't think I could come close to guessing when to exit or re-enter the market. I think the only solution to this problem is to buy-and-hold and not change my investment strategy based on my perception of what is "too expensive".

The article linked below is using S&P 500 data but notes that after a 20%+ increase the market is still more likely to increase than fall in the following year. In fact the S&P 500 has increased by over 20% since the date this article was posted on December 7, 2023.

https://awealthofcommonsense.com/2023/1 ... ck-market/

[trajan]

Every month! I am not clever or deluded enough to think I can beat the market, so a low-cost diversified global fund seems to be the best option.

(every time I have tried to be clever and time the market or the exchange rate, it went horribly wrong )

My story as well.

I can't buy the eMaxis products (US taxpayer) but basically everything in my portfolio is at all-time highs. I would not be surprized if everything fell very substantially but I don't think I could come close to guessing when to exit or re-enter the market. I think the only solution to this problem is to buy-and-hold and not change my investment strategy based on my perception of what is "too expensive".

The article linked below is using S&P 500 data but notes that after a 20%+ increase the market is still more likely to increase than fall in the following year. In fact the S&P 500 has increased by over 20% since the date this article was posted on December 7, 2023.

https://awealthofcommonsense.com/2023/1 ... ck-market/

Interesting. Thank you.

[Tsumitate Wrestler]

For our family the weak yen has encouraged us to go forward with the purchase of a home. We have liquidated some of our taxable investments, and going forward will be reducing our Tsumitate from 10-> 5 man a month as we take on a mortgage. It seemed like the right time for a larger "yen" purchase.

It is difficult to think of this as an investment in typical terms, but I am hoping the decent plot size of 101m2 will help the purchases maintain value after the structure has depreciated.

[trajan]

For our family the weak yen has encouraged us to go forward with the purchase of a home. We have liquidated some of our taxable investments, and going forward will be reducing our Tsumitate from 10-> 5 man a month as we take on a mortgage. It seemed like the right time for a larger "yen" purchase.

It is difficult to think of this as an investment in typical terms, but I am hoping the decent plot size of 101m2 will help the purchases maintain value after the structure has depreciated.

I have considered that but, as you say, value over time is a real concern.

Besides, I own property here already.

Has it always been like this in Japan? Real estate is one of the better time-proven investments in the Western countries where I've lived.