RetireJapan

jcc wrote: ↑Fri Mar 16, 2018 4:16 am
I'm not so sure about national grid though. Wouldn't owning an ADR of a UK company open you up to getting the dividends taxed in the UK and US before it even gets to japan?

Regarding gifts, it's a tough call alright. It's pretty common and it seems people like to take out stocks with a gift they'd use anyway. E.g. big kamera just gives you a gift card etc. If you're going to buy shit there anyway it's pretty much as good as cash... I suppose. There's a lot of gifts out there that might just make you spend more money than you're saving though. L-breath gives out a 30% off(? can't remember for sure) voucher that's good for up to 100,000 purchases, but what that means is people often buying a lot of shit they don't need.

I'm pretty sure there's no withholding tax on dividends for UK shares. You still have to pay 10% on the US side though.

As for shareholder benefits, if you hold an index fund of Japanese stocks then some of your money is already in these companies. The institutional investors who hold the stocks on your behalf are also entitled to the benefits but I guess they refuse them or otherwise dispose of them.

Rakuten also has a shareholder benefit program. https://global.rakuten.com/corp/news/pr ... 22_01.html

The best and brightest in the City and on Wall Street can't pick stocks any better than random dart-throwing, and they're doing it for a living, at far, far lower costs than you and I can.

Now - if you have the urge to find the next FANG stock or something and have ample free time, doing a bit of research as a hobby is probably educational and can't hurt monetarily long as it's not going to account for more than 5% (10% max) of your portfolio.

But there's solid research that the more investing you do (i.e., number of trades etc) the lower your returns - namely because you're constantly switching in and out (usually at the wrong times) and you're racking up transaction costs. And most of us don't have ample free time; I'd certainly rather be spending my time with my family and such.

For 99% of people, I'd stick to low-cost funds & ETFs, no more than 4-6, rebalancing once or twice a year at most. What time you do spend thinking about your investments should be spent on 'big picture' stuff: What exposure do I want (equities/debt/commodities/metals, developed/emerging etc) and then picking the funds/ETFs that give you the best cost performance for that exposure. Then make the investment and forget the password to your account for a year.

Pretty much agree with everything dragonash said there.

The one thing I'll add though is that if you have enough invested that you can construct your own buy and hold portfolio you may come out better(cutting out management fees and better tax efficiency) but have to work more for it(a simple 2-fund solution with stocks and bonds would return nearly the same for a lot less work)

Bogle(father of index funds) discusses such an effort in his Common sense on mutual funds and also wonders why no funds are trying to put together such a tax efficient fund(buy and hold based initially on index focused on growth stocks allowing the deferral of capital gains, have penalties for pulling out early). He also quotes experiments that have done exactly this and done very well(minimizing and deferring taxes is very powerful) with pre-tax results similar to those of index funds and post-tax results that are significantly better.

Still trying to figure out if I want to(or even can without accruing high trading costs) do it. I doubt I'll bother. If I did try for something similar I'd probably just go for VUG(vanguards growth etf), which is very low cost and without too much turnover. It's made up of us stock only and domiciled in the us so a) you only get taxed once on the majority of gains(the capital gains which produced the majority of its return) b) since it's all us stock in a us fund you only get double-taxed on dividends(once in the us once in japan) and you can get back some of the US part with a tax return.

DragonAsh wrote: ↑Fri Mar 16, 2018 10:23 am Now - if you have the urge to find the next FANG stock or something and have ample free time, doing a bit of research as a hobby is probably educational and can't hurt monetarily long as it's not going to account for more than 5% (10% max) of your portfolio.

I think most people around here are aware of the benefits of investing in diversified index funds, and it's where most of my money goes. However, investing in individual stocks can be extremely satisfying. I'm not naïve enough to believe I can beat the market long term, but it's been very enjoyable and educational so far.

jcc wrote: ↑Fri Mar 16, 2018 11:43 am Still trying to figure out if I want to(or even can without accruing high trading costs) do it. I doubt I'll bother. If I did try for something similar I'd probably just go for VUG(vanguards growth etf), which is very low cost and without too much turnover. It's made up of us stock only and domiciled in the us so a) you only get taxed once on the majority of gains(the capital gains which produced the majority of its return) b) since it's all us stock in a us fund you only get double-taxed on dividends(once in the us once in japan) and you can get back some of the US part with a tax return.

A five dollar fee on a 1000 dollar trade would work out at 0.05% over 10 years. It's even less for Japanese stocks.

Growth stocks might be the most tax efficient but I wonder how the total long term returns stack up. I always thought that value stocks outperform growth over the long term, with small cap value having the best returns.

I know all the arguments against market timing but I'd still be very reluctant to put much money in VUG at current valuations. Growth stocks have had a very good run and at the moment VUG looks like a collection of the most expensive stocks in the most expensive stock market in the world.

fools_gold wrote: ↑Fri Mar 16, 2018 10:46 pm Growth stocks might be the most tax efficient but I wonder how the total long term returns stack up. I always thought that value stocks outperform growth over the long term, with small cap value having the best returns.

I know all the arguments against market timing but I'd still be very reluctant to put much money in VUG at current valuations. Growth stocks have had a very good run and at the moment VUG looks like a collection of the most expensive stocks in the most expensive stock market in the world.

I'll second you on your market timing thing. Honestly, I'm also leery of some of the stuff in VUG(how long can amazon keep going up like this?), but I think overall it'll be fine, it's diversified over multiple sectors.

As to growth vs value? It comes and goes. Studies have showed both the produce long term returns over the past 100 years that are more or less equal. One will have a good long run, then the other. If you're buying to hold for 35 years, they should be about the same. Amazon may be ready for a plummet now, but we have no idea what's going to happen 10 years from now, never mind 20 or 35.

I picked VUG since it's about the best proxy for creating such a portfolio with reasonable costs and effort.