Buying the dip, speculating

[Tsumitate Wrestler]

I’m also curious why it’s not advantageous to use limit and stop loss orders on your NISA. For example, if you set the prices to exceed what you would gain if you left it, even including nisa limit resets. With these limits, you would get the best of both scenarios- cashing in on price fluctuations, or letting it sit and compound interest if that’s greater than the fluctuation.

Are you asking why day trading, or short term price speculation strategies do not work, or are you asking why the NISA is especially ill-suited for these strategies?

[Jackson]

More the latter.

A different but related question would be that it seems there’s nothing to lose (other than that year’s quota) by speculating with nisa. For example, I could drop ¥1m on ＭＡＸＩＳ米株ＳＰ５００ growth nisa, set a limit order to sell if it increases 5% during the rest of the year (very probable fluctuation), I make ¥50,000. In the unlikely event it doesn’t go up 5%, I can either just hold as a normal nisa, or wait until it does. With a stable ETF like this I risk nothing (there’s not even any transaction fees or tax). I’m making much more than what it’d get in interest sitting in a bank account. Am I missing something?

[beanhead]

I’m making much more than what it’d get in interest sitting in a bank account. Am I missing something?

Why are you comparing investing in global stock markets to a bank account? They are very different things.
In your example you gain 50,000 on your 1M in the NISA account. Some of my NISA years are up over 600,000 from 1.2M invested, even after the recent fall.
So why would you leave that money on the table? What is your objective here?

[sutebayashi]

More the latter.

A different but related question would be that it seems there’s nothing to lose (other than that year’s quota) by speculating with nisa. For example, I could drop ¥1m on ＭＡＸＩＳ米株ＳＰ５００ growth nisa, set a limit order to sell if it increases 5% during the rest of the year (very probable fluctuation), I make ¥50,000. In the unlikely event it doesn’t go up 5%, I can either just hold as a normal nisa, or wait until it does. With a stable ETF like this I risk nothing (there’s not even any transaction fees or tax). I’m making much more than what it’d get in interest sitting in a bank account. Am I missing something?

If it goes up 20% you'd have left a lot on the table.

If it goes down 40% you'd have done better leaving it in the bank.

Selling too early, rather than getting your winners run, tends to work against you

[Jackson]

Because my question is about short term, cash in hand returns. Not selective long term investments. I’m talking about potentially exact amounts of cash in days, you’re referring to years or decades.
I’m not sure how more specifically I can word my original question so the meaning is clear.

[Jackson]

More the latter.

A different but related question would be that it seems there’s nothing to lose (other than that year’s quota) by speculating with nisa. For example, I could drop ¥1m on ＭＡＸＩＳ米株ＳＰ５００ growth nisa, set a limit order to sell if it increases 5% during the rest of the year (very probable fluctuation), I make ¥50,000. In the unlikely event it doesn’t go up 5%, I can either just hold as a normal nisa, or wait until it does. With a stable ETF like this I risk nothing (there’s not even any transaction fees or tax). I’m making much more than what it’d get in interest sitting in a bank account. Am I missing something?

If it goes up 20% you'd have left a lot on the table.

If it goes down 40% you'd have done better leaving it in the bank.

Selling too early, rather than getting your winners run, tends to work against you

That wasn’t my question. I’m not sure how else I can word the question to make the meaning more clear.

[sutebayashi]

I don't see that it makes a lot of difference whether you do this with NISA or with a taxable account, and sorry if that isn't your question either

If it was a great idea I think few people would opt to hold cash, rather everyone would subject their cash to the market risk in the hope of making 5%.

But people do hold cash.

So it seems to be a question of whether you really want to hold the ETF for the long term even if it dips in the short term, and whether you need your cash in the near term.

If you don't need the cash in the short term you might as well leave it invested. Otherwise you'll have another 5% cash but then what are you going to do

If you want to have money to speculate with that's fine but this is money that you shouldn't expect to have available if the market goes against you before you want to use the funds. No problem using NISA for speculation if you aren't going to use it for long term investing otherwise, but take care not to sell for a loss in NISA

[Tsumitate Wrestler]

More the latter.

A different but related question would be that it seems there’s nothing to lose (other than that year’s quota) by speculating with nisa. For example, I could drop ¥1m on ＭＡＸＩＳ米株ＳＰ５００ growth nisa, set a limit order to sell if it increases 5% during the rest of the year (very probable fluctuation), I make ¥50,000. In the unlikely event it doesn’t go up 5%, I can either just hold as a normal nisa, or wait until it does. With a stable ETF like this I risk nothing (there’s not even any transaction fees or tax). I’m making much more than what it’d get in interest sitting in a bank account. Am I missing something?

If it goes up 20% you'd have left a lot on the table.

If it goes down 40% you'd have done better leaving it in the bank.

Selling too early, rather than getting your winners run, tends to work against you

That wasn’t my question. I’m not sure how else I can word the question to make the meaning more clear.

Short answer, stop loses can fail for multiple reasons, and they often do.

The broker does not guarantee them.

This is not a valid strategy.

[ChapInTokyo]

You can buy ETFs in the growth frame of the Nisa. Simply go to the ETF. From the ETfs page during the buy process, you can select the framework. Along with other purchase options.

Use the superscreener to see what ETFs are allowed.
https://www.rakuten-sec.co.jp/web/info/ ... 17-01.html

Is that ETF I originally linked the only one which meets all the criteria I outlined?

No. The 1655 iShares S&P500 米国株ETF that @tsumitatewrestler linked previously is also available in Rakuten’s NISA 成長投資枠 and is more popular than the Maxis 米国株SP500 ETF that you linked in your OP. I think that 1655 has significantly higher per day trade volume than 2558 so might be preferable for you.

https://www.rakuten-sec.co.jp/web/marke ... sa/#skip03

Pity though that the dip is no longer as significant as it was immediately after Trump’s ‘Liberation Day’ announcement. I think if you’d taken a position then, you’d definitely have made a bit of pocket money.

But as they say, past performance is no guarantee of future results!

[Tsumitate Wrestler]

Bought 2559 in my taxable 3 weeks ago. Its +10% now. I will roll it into my 2026 NISA and swap it for the Emaxis Version.

https://g.co/finance/2559:TYO?window=1M

My instinct said to buy more, but I did not want to dip into other buckets.