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Re: Simple Q&A - Stock market investing
Posted: Thu Sep 08, 2022 12:00 pm
by TokyoBoglehead
Tkydon wrote: ↑Thu Sep 08, 2022 5:14 am
It is nice to receive the Dividend, but you have to remember that the dividend is paid out of After Tax Free Tax Flow (has already been taxed).
You then get taxed again on the Dividend Income (Unavoidable Double Taxation).
If you want to use the Dividend Income to live on in Retirement, then that may be perfectly OK. Alternatively, you could just sell some shares occassionally...
But, if you are investing for the Long-Term, then this may not be the most efficient strategy...
You could think of the Dividend Taxes as being 'equivalent' to the high Fees on Managed Mutual Funds, reducing the compounding effect of your investments over time.
Japanese trusts (read funds/mutual funds {ala Emaxis Slim}) internally reinvest their dividends, so no tax is levied. This is a huge advantage for investors during the accumulation phase. This is is one of the reasons they are recommended over ETFs in Japan.
They are hugely advantageous in a NISA or Ideco.
They also allow one to avoid all this mumbo-jumbo!
Re: Simple Q&A - Stock market investing
Posted: Thu Sep 08, 2022 4:32 pm
by Tkydon
Yes, thanks should be a little bit more careful and include the caveats where the general statement is not true...
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 1:38 am
by tim
I have been curious by the following questions about dividend,
and been watching stuff about it, and it seems it suits my preferences but I have multiple questions about it.
What if I select my own stocks
Example: Buy 20+ stocks [health sector, energy sector, technology sector , etc]
of course I'll be researching about that company.
Is this better than just buying Dividend index funds? I want to avoid the management fee.
Like: ｱﾗｲｱﾝｽ･ﾊﾞｰﾝｽﾀｲﾝ･米国成長株投信Dｺｰｽ毎月決算型(為替ﾍｯｼﾞなし)予想分配金提1示型 or OUSA
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 2:10 am
by zeroshiki
I'm not sure what your question is. If you feel confident you can pick them (or have a good crystal ball) and the dividends will give you better returns then go ahead. No one here knows what stocks you plan on buying to give any kind of educated opinion on whether your 20 stocks will outperform that mutual fund.
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 2:38 am
by tim
zeroshiki wrote: ↑Fri Sep 09, 2022 2:10 am
No one here knows what stocks you plan on buying to give any kind of educated opinion on whether your 20 stocks will outperform that mutual fund.
I am planning to like copy how OUSA choose their stocks and buy them manually.
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 3:22 am
by zeroshiki
So you have the time to search for the exact composition of that fund and then do all the rebalancing all the time? Maybe you should take up stock trading as a career?
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 3:46 am
by tim
zeroshiki wrote: ↑Fri Sep 09, 2022 3:22 am
So you have the time to search for the exact composition of that fund and then do all the rebalancing all the time? Maybe you should take up stock trading as a career?
Thanks, if that's case then I'll rather buy Dividend index funds haha
don't know nothing about rebalancing
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 5:18 am
by TokyoBoglehead
tim wrote: ↑Fri Sep 09, 2022 3:46 am
zeroshiki wrote: ↑Fri Sep 09, 2022 3:22 am
So you have the time to search for the exact composition of that fund and then do all the rebalancing all the time? Maybe you should take up stock trading as a career?
Thanks, if that's case then I'll rather buy Dividend index funds haha
don't know nothing about rebalancing
Why did you decide to pursue dividend investing, as opposed to using an accumulating mutual fund? What is your reasoning?
It will leave you with a less diversified investment, and will cause you to pay higher taxes.
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 6:17 am
by tim
TokyoBoglehead wrote: ↑Fri Sep 09, 2022 5:18 am
Why did you decide to pursue dividend investing, as opposed to using an accumulating mutual fund? What is your reasoning?
It will leave you with a less diversified investment, and will cause you to pay higher taxes.
I thought that by buying dividend index funds I don't have to deal with selling my stocks in the future.
I just want to keep buying and money will flow eventually flow into my bank.
Compared to mutual funds that in the future I where I will be deciding whether its time to sell or hold.
(probably I still don't know the concept of buying and selling of index funds)
from what I watched in Youtube having dividend will be tax free if within the bracket
didn't know that wasn't the case here in Japan.
Please show me the way
Re: Simple Q&A - Stock market investing
Posted: Fri Sep 09, 2022 6:22 am
by TokyoBoglehead
tim wrote: ↑Fri Sep 09, 2022 6:17 am
TokyoBoglehead wrote: ↑Fri Sep 09, 2022 5:18 am
Why did you decide to pursue dividend investing, as opposed to using an accumulating mutual fund? What is your reasoning?
It will leave you with a less diversified investment, and will cause you to pay higher taxes.
I thought that by buying dividend index funds I don't have to deal with selling my stocks in the future.
I just want to keep buying and money will flow eventually flow into my bank.
Compared to mutual funds that in the future I where I will be deciding whether its time to sell or hold.
(probably I still don't know the concept of buying and selling of index funds)
from what I watched in Youtube having dividend will be tax free if within the bracket
didn't know that wasn't the case here in Japan.
Please show me the way
I strongly, strongly suggest you stop with the Youtubers. Set aside an hour or two and read through this. You need to understand the basics first. Then focus on the Japanese specifics.
https://ia803405.us.archive.org/23/item ... esting.pdf