RetireJapan

mighty58 wrote: ↑Thu Apr 29, 2021 12:23 pm Seems like we're going around in circles in this thread. Many people (myself included) have stated that (1) past performance indicates you are more likely to come out ahead than not, (2) however, past performance is not a guarantee of future performance, (3) therefore, whether you want to take your "guaranteed" 2.8% or invest is ultimately up to the amount of risk you want to take.

Is there something else you:re looking for not covered by these replies?

RMA wrote: ↑Fri Apr 30, 2021 1:04 am

mighty58 wrote: ↑Thu Apr 29, 2021 12:23 pm Seems like we're going around in circles in this thread. Many people (myself included) have stated that (1) past performance indicates you are more likely to come out ahead than not, (2) however, past performance is not a guarantee of future performance, (3) therefore, whether you want to take your "guaranteed" 2.8% or invest is ultimately up to the amount of risk you want to take.

Is there something else you:re looking for not covered by these replies?

Thank you very much for your reply and I apologize for all the confusion. In nutshell my question consisted of 2 points:

1. Guaranteed 2.8% interest from bank (no appreciation) or investing?

2. If investing then what are the safe and sound options?

On first point, I understand that it mainly comes down to personal decision and how much one is interested in taking risks and what proportion he's already investing in equities and fixed returns etc. The community can help very little in this case especially when they do not know all the details so I would like to drop that point here.

Now I am interested in second point, i.e., if I forgo 2.8% guaranteed returns in favor of investing then what should be my best bets? I would like to have balance diversified portfolio where I should get yearly returns to cover some loss of interest and I will not be looking for short term appreciation however in long term (say 10 years) I should be expecting it to appreciate.

Kanto wrote: ↑Fri Apr 30, 2021 1:32 am
The confusion came from members being unsure if you were talking about 2.8% interest to be paid annually on a loan, or 2.8% guaranteed return interest on a deposit. You seem to get back and forth on this point.

Kanto wrote: ↑Fri Apr 30, 2021 1:32 am
1. You cannot get 2.8% on a bank in a deposit. This may be possible with an annuity product...before fees.

Kanto wrote: ↑Fri Apr 30, 2021 1:32 am
2. The investment should be treated as part of your whole portfolio. What are you invested in now?

Kanto wrote: ↑Fri Apr 30, 2021 1:32 am
The standard advice for a portfolio is diversified, low-cost index funds. (Emaxis series).

You can add more bond exposure to cut the downside risk.

If you are worried about currency exposure you can purchase hedged products.

RMA wrote: ↑Fri Apr 30, 2021 3:24 am After some searching on the internet I found the dividend return on S&P 500 ETF as attached. Can anyone confirm if I can expect the same dividend return on domestic Maxis S&P 500 ETF (2558)?

Kanto wrote: ↑Fri Apr 30, 2021 4:12 am

RMA wrote: ↑Fri Apr 30, 2021 3:24 am After some searching on the internet I found the dividend return on S&P 500 ETF as attached. Can anyone confirm if I can expect the same dividend return on domestic Maxis S&P 500 ETF (2558)?

No one can confirm future returns.

2558 is young and has only returned dividends twice. (see attached).

Remember, you will need to pay a 20% tax on these dividends.

Can you offset the tax? I do not think so. Why? Because the terms of the loan would not allow you to use it for investments. Those loan terms do not exist as far as I know. However, that is a question for an accountant or the bank.



return.jpg

Source -> https://maxis.mukam.jp/etf_fund/182558.html

Kanto wrote: ↑Fri Apr 30, 2021 4:12 am Remember, you will need to pay a 20% tax on these dividends.

TBS wrote: ↑Fri Apr 30, 2021 5:55 am

Kanto wrote: ↑Fri Apr 30, 2021 4:12 am Remember, you will need to pay a 20% tax on these dividends.

The tax by Japan now works out to be less than 20% on these dividends, because of the deduction for the foreign taxes that are withheld. It means the net dividends per unit of the 2558 MAXIS ETF last year were:

- 2020/06/08 ~23 yen
- 2020/12/08 ~55 yen

The calculations are automatic if holding in tokutei kouza. See more here and the post I wrote on this.

RMA: if you buy via NISA or Tsumitate NISA, you will get the gross amounts (27 yen and 63 yen) in the screenshot Kanto posted.