Advice on what stocks to buy

[TylerDunne]

Hi,

I'm looking to start a NISA account, most likely with Rakuten, and I'm wondering if now is a good time to invest? I guess if prices are low then that's a good entry point, yeah? And I'm still getting my head around how it all works, but with the low stock prices and uncertainty should I avoid dividend paying stocks and focus on growth for now? One more thing, I was looking at the long term NISA account initially, but should I maybe go the short term one to be able to invest more now that prices are lower? And then switch to the long term later, if that's even possible. That's a lot of questions, sorry! But basically any general advice for starting a NISA account in this current climate for this investing noob will be greatly appreciated.

Thanks!

[ricardo]

Anyone who knows the answers to your questions would not be spending their time on a forum like this. They’d be sitting on a desert island surrounded by beautiful people pouring them drinks all day...

[RetireJapan]

Ha, ha, indeed.

But I think it is always a good time to start thinking about personal finance.

And it is generally better to buy stocks when prices are lower.

I would recommend reading as much as possible, both here and from the reading list on the site, and also starting small.

Make a plan, start investing a regular amount each month, and you will learn so much. Just be wary of investing everything at once, or of investing more than you are comfortable with.

Start with low cost index funds rather than single stocks. Focus on NISA and iDeCo first.

And keep asking questions

[TylerDunne]

Ok, apologies for my questions being too broad or too specific, but that general advice is helpful, thanks!

I guess what I'm trying to ask is given that prices are low, and that a recovery is likely to be slow, is buying growth stocks right now instead of dividend stocks a reasonable strategy? Surely short term dividends won't be great right now, yeah? I'm looking to buy index funds, are they able to be either dividend or growth? I might be completely wrong here, I only learnt that stocks can be one or the other just recently, but maybe this doesn't apply to index funds, only single stocks? Perhaps that's what I'm not understanding.

Hope this is a better question.

Thanks!

[adamu]

An index is a price based on a list of specific stocks, such as MSCI World.

An index fund tries to buy securities in order to track the price of the index, such as eMAXIS Slim All Country.

The properties of the index fund depend completely on the securities it invests in.

A broad-market fund that you're likely to buy for a NISA doesn't care about whether the stocks it buys are growth or dividend. Usually for these funds, if a stock pays out a dividend, it gets reinvested into the fund. But that 's not always the case - some index funds pay out the dividends.

In terms of whether now is a good time to invest, I'm just going to continue my monthly investing. My thinking is that if we survive coronavirus (probably will, unless you get it and you're the unlucky 1/50), then renewed productivity will be reflected in upwards markets again. But the real answer is nobody knows.

[TylerDunne]

Thanks for that, things are starting to make a bit more sense to me now. Cheers!

[jcc]

Here's a super-simple stock portfolio you can get started with

stocks: ｅＭＡＸＩＳ Ｓｌｉｍ 全世界株式（オール・カントリー） all nations stock(expenses of 0.1%)
bonds: ＜購入・換金手数料なし＞ニッセイ外国債券インデックスファンド developed countries bond index(expenses of 0.154% any other developed nations bond index will do if you can find cheaper)

Why eMaxis slim? Last I checked it's the cheapest option in japan. Why not get 0 cost vanguard ETFs? You open yourself up to additional taxation and there are currency exchange costs. The last time I calculated it it wasn't worth it but the situation MIGHT have changed. Either way, it's a tiny difference if there is one.

Go 60/50 or 70/30 or 80/20 or 90/10 on those two according to your risk acceptance.

If you want to get fancy, you can split up the all nations one into developed/developing/japan. Personally I did this and weighted Japan a bit heavier jsut for the lower currency risk as I intend to live here long term.

Other things you can do are buy REITs or small amounts of commodities to further diversify, but tbh assuming you're in your 30s an 80/20 split is all you need until you take time to learn a bit more(and that is all micro-optimizations)

And don't dump all your savings in in one go. Things may drop further or they may start going back up. It's hard to be sure but you can lower your risk if you ease yourself into the market.

[Chris]

Only started my NISA this week but OIS have been performing well for me. Currently up 8% to 9%, but shall see what it opens at today.

https://www.fool.com/investing/2020/06/ ... other.aspx

Seen some consistent growth since the COVID-19 oil crash. Maybe a risk but could see some good long-term returns from it, so I am keeping a keen eye on it.

On the opposite contrast to OIS, Canadian Solar as seen a good 5% growth for me as well.