RetireJapan

Hey all, so this is kind of a general post, up till now I've been investing solely in mutual funds in my Rakuten NISA and 特定 accounts. I am looking to invest in a few stocks directly (US), but before I do, I want to know just how it can work.

For example, if my intention is to buy 10 shares of a company whose shares are individually worth $100, it will cost me $1,000 at around 103 JPY per $1, according to the current exchange rate on Rakuten.

Questions:

1. When I place the order, how long does it usually take to buy?
2. When I decide to sell, how long does the sale usually take? I ask as if the stock is tanking and my wish is to get out, I don't want to be at a disadvantage to others trading directly in the US.
3. When I sell, what are the fees/ taxes? I assume there's another currency exchange for USD -> JPY as I do not want a $ balance (or maybe there's an option?). Unfortunately I can't seem to check without already owning some myself.
4. Addition to q3; I would be purchasing these in my 特定 account so I assume everything is handled tax-wise, but would like some understanding of exactly how much I lose. For example, if the stock doubled to $200 and I sold all, I assume I wouldn't get $2,000 but something less. What would the 'less' be?

Apologies for very basic questions! Thanks in advance

Viralriver wrote: ↑Wed Jan 27, 2021 6:50 am 1. When I place the order, how long does it usually take to buy?

It depends on how you place the order. Usually it is recommended to make a limit-order (meaning setting a maximum price), so that sudden market changes can not screw up your budget). The fullfillment is usually pretty fast (if there are stocks avaiable for the price). But it is definitely not mili-second trading. But I think that shouldnt be your goal

Viralriver wrote: ↑Wed Jan 27, 2021 6:50 am 2. When I decide to sell, how long does the sale usually take? I ask as if the stock is tanking and my wish is to get out, I don't want to be at a disadvantage to others trading directly in the US.

Again, it depends on which price you ask, or if you just sell. If you just sell, the order will be fast. I am not sure if you are at a disavantage compared to US users, but you and every individual user, no matter where they are, are at a disadvantage compared to banks and other corporations who trade professionally. They have direct access to the stock exchanges and manage trading only networks and IT-infrastructure where they manage latency in the low mili second region, backed by automatic trading-algorithms (this was 10 years ago when I was working in the finance IT-Networking industry, today its probably even faster). So if a stock or the market is tanking, until you react and wish to sell something, proffesional traders already sold and drove the price further down. Even if you have a broker, that allows a preset stop-loss order (eg sell below a set price), that order will be slower than that of organisations who do this for a living. But again, I don't think that is the kind of investing that is usually advised here.

Viralriver wrote: ↑Wed Jan 27, 2021 6:50 am 3. When I sell, what are the fees/ taxes? I assume there's another currency exchange for USD -> JPY as I do not want a $ balance (or maybe there's an option?). Unfortunately I can't seem to check without already owning some myself.

There is probably an automatic conversion (SBI which I use has one), but the exchange rate is pretty bad. Fees are 0.45% of the trade up to a maximum of 22 USD. I may be wrong, but I think USD dividends are also paid out in USD.

Viralriver wrote: ↑Wed Jan 27, 2021 6:50 am 4. Addition to q3; I would be purchasing these in my 特定 account so I assume everything is handled tax-wise, but would like some understanding of exactly how much I lose. For example, if the stock doubled to $200 and I sold all, I assume I wouldn't get $2,000 but something less. What would the 'less' be?

Capital Gains Tax is 20.315% So from 1000 USD you would have to pay 203.15 USD. For Dividends there is an additonal US witholding Tax of 10%.

This is incredibly helpful, thank you.

What I get from that is I'm at a disadvantage in the first place, and me going through Rakuten shouldn't provide any significant additional disadvantage compared to the standard US trader, apart from potentially the currency exchange.

I wonder if it's possible to pay in to my account in USD... That way I can probably take advantage of more favourable exchange rates through Revolut for example.