RetireJapan

MBK wrote: ↑Sat Apr 23, 2022 4:14 am also want to invest a lump sum of money (several million JPY). Reading through number of books, index funds seem to be the way to go since I`m planning to invest long term.

My question is how does the current weak JPY affect this potential investment? If I`m looking to invest in index fund is it preferable to wait a while until the currency stabilizes again or with index it does not really matter?

Nobody knows the future. What if the yen never recovers? Then you'll be waiting forever.

This Bogleheads wiki page has a good overview of the issues involved with investing a lump sum.

https://www.bogleheads.org/wiki/Dollar_cost_averaging

adamu wrote: ↑Sat Apr 23, 2022 11:26 am

MBK wrote: ↑Sat Apr 23, 2022 4:14 am also want to invest a lump sum of money (several million JPY). Reading through number of books, index funds seem to be the way to go since I`m planning to invest long term.

My question is how does the current weak JPY affect this potential investment? If I`m looking to invest in index fund is it preferable to wait a while until the currency stabilizes again or with index it does not really matter?

Nobody knows the future. What if the yen never recovers? Then you'll be waiting forever.

This Bogleheads wiki page has a good overview of the issues involved with investing a lump sum.

https://www.bogleheads.org/wiki/Dollar_cost_averaging

I agree with Adam when it comes to equities. Stay the course.

However, YEN investor probably do not want to consider foreign bonds at the moment. The Bogleheads approach to bonds does not translate 1 to 1 for a foreign investor who faces currency risk in this type of climate.

I'm facing the same situation as the OP at the moment (lump sum to invest). Normally, a weakening of a few yen wouldn't phase me, but the recent movement has been highly abnormal and I don't think it will persist beyond the next few months. It is simply causing too much pain to too many companies (https://www.forexlive.com/news/reuters- ... -20220413/), not too mention the little people like us, such that if it continues for much longer the government will be forced to step in (they're already looking at options to intervene now, but it's hard to act unilaterally and the rest of the world is too focused on Ukraine at the moment to care.)

Best strategy is to have diversified portfolio with rebalancing rules in place. If the S&P's rise triggers a rebalancing according to your rules, then rebalance according to your rules. The particular cause of your portfolio becoming unbalanced (falling yen in this case, but there will always be an apparent particular cause to point to) shouldn't be given any special significance in your thinking.

All in my opinion, obviously.

Haystack wrote: ↑Sat Apr 23, 2022 12:10 pm
I agree with Adam when it comes to equities. Stay the course.

Agreed. But in this case the OP does not yet have a course. The question is more about taking the first steps on the path of investment.
Since the poster has a sizable lump sum to invest, the options are:

1) ignore the noise (including FX) and invest all of it now
2) DCA over a few months
3) continue sitting on the pile of cash and wait for some signal (from God?) to start investing this cash

Can we make that a Poll?

I vote for 3, but the signal won't come from God... It will come from the Market

Tkydon wrote: ↑Sun Apr 24, 2022 12:42 pm Can we make that a Poll?

I vote for 3, but the signal won't come from God... It will come from the Market

One must ask, If you think you can time the market so effectively why aren't you making millions trading FX?

It is all noise in my opinion. Whether you are practicing "technical analysis", reading FED minutes, analyzing Powell`s tie choices, or reading tea leaves.

Pick a broad, global, low cost index. Automate your investments, and tune out as best you can. You will outperform 90%+ active investors.

Haystack wrote: ↑Sun Apr 24, 2022 2:17 pm One must ask, If you think you can time the market so effectively why are you making millions trading FX?

I think you meant to say, "why aren't you..."

Tkydon wrote: ↑Sun Apr 24, 2022 4:56 pm

Haystack wrote: ↑Sun Apr 24, 2022 2:17 pm One must ask, If you think you can time the market so effectively why are you making millions trading FX?

I think you meant to say, "why aren't you..."

Indeed. I wonder where the confidence comes from in light of the overwhelming evidence indicating how impossibly difficult market timing is.

My goal is to buy as many units of an instrument as I can at the lowest possible average Yen price.

Whilst falling instrument prices may help me to achieve that goal, paying 10% more for the same instrument due to the weakening Yen does not.

If I think assets are too expensive, I simply will not buy them, and wait until the price is more to my liking, or find something else that does have a price that is more to my liking...

You lock in your price when you buy...