RetireJapan

Have a chunk invested in the Emaxis tracking fund of the S&P 500. Recently, the fund has seen dramatic moves up due to artificial inflation because of yen weakness. Even my purchases from less than 2 years ago have risen 50%+ due to yen weakness.

I just don't see the yen staying this weak for the long term. Does it make sense to take profits now and wait out the current phase until the yen strengthens again and then repurchase?

I would personally keep it invested, as time in the market will likely beat timing the market.
Unless you absolutely need the cash now or will need it soon for some reason.

Any strengthening of the Yen from here will offset any gain in the underlying assets, or amplify any loss in the underlying assets.

The whole point of investing in low cost index funds is to invest regularly and for long term, and not try to time the market. If you're using terms like "cash out for a bit", maybe index fund investing is not for you.

I think there is an asset allocation question there though. What was your reason for picking S&P500 over a total market or whole world fund? What will do you if there's another US crash in the future?

Bit of an unusual question, but alright. I'm American, know this market and the companies far better than those in a more global index, this is one of the world's oldest, most long-term stable, and best performing indexes over time, and, looking at the performance of more global funds, the risk level does not appear to be appreciably better nor the performance significantly stronger - in combination - than the S&P 500. It is also one of, if not the largest, index in the world with companies that are about as safe to invest in in the aggregate as those on any index. You imply that a crash in the future would affect a world fund far less than the S&P 500, but the world economy being tied as it is (for better or worse) to the US economy, not to mention the fact that a large proportion of any "global" fund would be dominated by US stocks, I'm not sure how much safer you're going to be investing in a less established fund than one that tracks the S&P. Also, the last time these was a crash in the S&P in 2008, which was no doubt significant, global funds experienced their own share of pain and often as not took longer to rebound than the American indices.

And yet...To each his/her own. Despite these points, I'm certainly not going to question anyone for choosing one fund over another. I was just proposing a hypothetical for taking advantage of a downswing in the value of the yen, not necessarily looking for responses that question my entire investing approach.

Occidental wrote: ↑Thu Apr 21, 2022 3:43 am To each his/her own. Despite these points, I'm certainly not going to question anyone for choosing one fund over another. I was just proposing a hypothetical for taking advantage of a downswing in the value of the yen, not necessarily looking for responses that question my entire investing approach.

Indeed. The reason I did so is because you're holding an index fund, and one of the common reasons for doing that is to use a passive investing strategy that aims to work without intervention over time and regardless of short-term market movements. Especially on a retirement forum, passive investing is a common recommendation. And the biggest destroyer of success for passive investors is getting tempted to react to market conditions and taking actions that eventually result in poorer performance. So I guess my answer would be: if you are pursuing a passive investment strategy, then no, it doesn't make sense. I admit I might have been triggered by your post after quite a few similar discussions recently, and watching people here lose money in March last year.

The reason I asked about S&P500 vs Global is because we're in Japan so I was curious about the US focus. The thread is titled just "E-maxis slim" and the All Country fund is often discussed here, so it was more of a clarification point. I was thinking that if you're sensitive to the price of the US investments in Yen, there's a possibility that your asset allocation does not represent your actual risk attitude.

Occidental wrote: ↑Thu Apr 21, 2022 3:43 am ...I'm American...

Are you American as in a US National? I.e. not a North/Central American non-US national? Are you ok with all the IRS PFIC requirements for investing in E-maxis Slim?

Is your investment horizon long-term or short? If it's long term, stay in. Jumping in and out, ie. attempting to take advantage of temporary market conditions, is the surest way to underperforming in the long term. Now, that's not to say you couldn't nail it exactly right and profit handsomely, it certainly is possible, but this is exactly how, statistically speaking, individual investors shoot themselves in the foot.

https://www.google.com/search?q=america ... e&ie=UTF-8

The e-maxis S&P investments are done through my partner’s accounts. She is not American so fortunately no tax consequences such as those you mentioned.

Occidental wrote: ↑Thu Apr 21, 2022 5:26 am https://www.google.com/search?q=america ... e&ie=UTF-8

The e-maxis S&P investments are done through my partner’s accounts. She is not American so fortunately no tax consequences such as those you mentioned.