RetireJapan

So I would like to ask a few questions to those that actually buy shares/and also index funds,

So why would we want to buy shares in a single company if we can the the same money into an index fund, and still buy the same stocks, and still get a dividend from that company? 100 dollars in apple is a bigger risk when we could put the same one 100 dollars into the index fund which has apple plus Tesla, Boeing et al.

Also if we buy shares on Rakuten, for example APPLE or TESLA, aren't we also paying some transaction fees? Although I don't see where that fee is listed.

Now looking at Tesla $723 and apple at $140 per share, do we have to buy a single share, can you purchase say $100 dollars of said shares, but must surely insure a cost.

Sorry for the dumb question but I thought it seemed reasonable.

The reason is that we think we are clever and can choose the 'best' companies.
Index funds should give you good, steady growth as long as you are patient. But the data shows that most of the growth of, for example, the S&P 500, comes from just a few companies.
So if you buy that fund you are getting the growth of Apple or NVIDIA or whatever, but also the poor performance of AT&T.

Those of us that think we are smart say 'Hey, if I just buy Apple/Amazon/Tesla etc etc, we can get the growth of the best companies without being dragged down by the poor performers!

The problems with this approach are well-discussed, so I won't go into them. Suffice to say that past performance does not guarantee future success...

I buy a few individual stocks myself. I keep the amounts small, and sometimes I make money and sometimes I sell at a small loss. It is fun to watch a stock for a while and buy it at a discount, but index fund investing is simpler and less risky.
As you said, there are also fees for both buying and selling US-traded stocks. It is on the Rakuten site here:
https://www.rakuten-sec.co.jp/web/forei ... ssion.html

I don't know if it is possible to buy less than 1 stock. I don't think so. For Japanese stocks some brokers now allow you to buy in less than 100 shares, but I don't know if Rakuten has started this yet.

Bubblegun wrote: ↑Thu Jul 07, 2022 3:43 pm So I would like to ask a few questions to those that actually buy shares/and also index funds,

So why would we want to buy shares in a single company if we can the the same money into an index fund, and still buy the same stocks, and still get a dividend from that company? 100 dollars in apple is a bigger risk when we could put the same one 100 dollars into the index fund which has apple plus Tesla, Boeing et al.

Also if we buy shares on Rakuten, for example APPLE or TESLA, aren't we also paying some transaction fees? Although I don't see where that fee is listed.

Now looking at Tesla $723 and apple at $140 per share, do we have to buy a single share, can you purchase say $100 dollars of said shares, but must surely insure a cost.

Sorry for the dumb question but I thought it seemed reasonable.

Finance industry professionals say high risk, high return.
May be that is the point of attraction for single company share investors/traders. You lose big, but you win big kind of thing. (like venture capitalists)

For single company from US, you can buy minimum 1 share through Rakuten.
There are charges for it usually around 2-3 USD (not per share), I think this is determined by the amount of share you are buying. (total price, for example if under 1000 USD then 3USD or something like that. I might be wrong) You can try to see what are the charges incurred by starting a buy order for any company. They will show the charges.

For single company from Japan, I think purchase quantity needs to be in multiple of 100 shares.

beanhead wrote: ↑Fri Jul 08, 2022 12:28 am The reason is that we think we are clever and can choose the 'best' companies.

Well I agree. but if as buffet et al say is correct then, buying Apple, or Coca Cola is boring, and it will produce dividends, and still be there in 40 years time.

beanhead wrote: ↑Fri Jul 08, 2022 12:28 am
So if you buy that fund you are getting the growth of Apple or NVIDIA or whatever, but also the poor performance of AT&T.

Those of us that think we are smart say 'Hey, if I just buy Apple/Amazon/Tesla etc etc, we can get the growth of the best companies without being dragged down by the poor performers!

Yes of course we may be buying a poor performer but isn't that just comparing it to the super shiny stars, when actually AT&T and say Ford aren't exciting, but will be there in around 40 years, still make a profit and provide a dividend.(hopefully).

beanhead wrote: ↑Fri Jul 08, 2022 12:28 am . Suffice to say that past performance does not guarantee future success...

I have to agree, but here's my problem with that go to clause that all the funds use. They will always refer to the history, ( not of the shares themselves) but the history of the stock market or the S&p500. Every single news channel reports the same figures, every Youtuber too. So isn't that just a cover my back clause? Remember if they want to keep saying that, then why keep flipping it. and saying look at all the wonderful returns you can get over the long term? That is past performance! No?

beanhead wrote: ↑Fri Jul 08, 2022 12:28 am
I buy a few individual stocks myself. I keep the amounts small, and sometimes I make money and sometimes I sell at a small loss. It is fun to watch a stock for a while and buy it at a discount, but index fund investing is simpler and less risky.

That's useful to know. My friends back home like to bet on the horses or play on the puggy.( one arm bandit). And I wonder what are the actual odds of picking a winner stock. kinda gambling!
May I be so cheeky as to ask how many shares you'd buy at a single time or how much you'd be willing to "play with"?

beanhead wrote: ↑Fri Jul 08, 2022 12:28 am As you said, there are also fees for both buying and selling US-traded stocks. It is on the Rakuten site here:
https://www.rakuten-sec.co.jp/web/forei ... ssion.html

Thanks for that, and your help.

Bubblegun wrote: ↑Fri Jul 08, 2022 1:31 am
That's useful to know. My friends back home like to bet on the horses or play on the puggy.( one arm bandit). And I wonder what are the actual odds of picking a winner stock. kinda gambling!
May I be so cheeky as to ask how many shares you'd buy at a single time or how much you'd be willing to "play with"?

Haha. I don't like to gamble, but do buy a few individual stocks...go figure...
Share numbers: 5 to 40 of one company, depending on the price.
I had an initial rule of thumb to keep to around 100,000yen value per US-listed company.
I just sold a bunch because the yen-dollar rate was too good for assets purchased with a stronger yen. The increase in value was mostly down to the exchange rate, so I decided to take some 'fake' profits and reduce the risk.
Basically I have purchased some tech, some healthcare and then a couple of dividend kings like Coca Cola.
The healthcare stocks have given the best returns in a fairly short time.

I actually prefer Japanese dividend-paying companies. Taxes are simpler, fees are simpler, no exchange rate to worry about. Again, play money, but the damn 100-stock minimum purchase makes many companies too expensive.

Bubblegun wrote: ↑Fri Jul 08, 2022 1:31 am Well I agree. but if as buffet et al say is correct then, buying Apple, or Coca Cola is boring, and it will produce dividends, and still be there in 40 years time.

The main problem with choosing stocks is that 90%+ of them underperform the market as a whole.

If you are lucky enough to choose the ones that do well, you can outperform the market providing you don't sell them at the wrong time. Very few people manage to do both of these, and choosing stocks takes a lot of time and can be stressful.

Which is why everyone (including Buffett) recommends index funds.

Not to say that you shouldn't experiment, but probably a good idea to keep most of your investments in something sensible.

beanhead wrote: ↑Fri Jul 08, 2022 2:10 am

Bubblegun wrote: ↑Fri Jul 08, 2022 1:31 am
That's useful to know. My friends back home like to bet on the horses or play on the puggy.( one arm bandit). And I wonder what are the actual odds of picking a winner stock. kinda gambling!
May I be so cheeky as to ask how many shares you'd buy at a single time or how much you'd be willing to "play with"?

Haha. I don't like to gamble, but do buy a few individual stocks...go figure...
Share numbers: 5 to 40 of one company, depending on the price.
I had an initial rule of thumb to keep to around 100,000yen value per US-listed company.
I just sold a bunch because the yen-dollar rate was too good for assets purchased with a stronger yen. The increase in value was mostly down to the exchange rate, so I decided to take some 'fake' profits and reduce the risk.
Basically I have purchased some tech, some healthcare and then a couple of dividend kings like Coca Cola.
The healthcare stocks have given the best returns in a fairly short time.

I actually prefer Japanese dividend-paying companies. Taxes are simpler, fees are simpler, no exchange rate to worry about. Again, play money, but the damn 100-stock minimum purchase makes many companies too expensive.

Ok that's all interesting. I wonder why Rakuten don't do all that tax bumf for you.
My biggest fear of delving into anything like that is, paperwork and having the evil tax man, think I'm some dodgy dealer.

RetireJapan wrote: ↑Fri Jul 08, 2022 2:18 am

Bubblegun wrote: ↑Fri Jul 08, 2022 1:31 am Well I agree. but if as buffet et al say is correct then, buying Apple, or Coca Cola is boring, and it will produce dividends, and still be there in 40 years time.

The main problem with choosing stocks is that 90%+ of them underperform the market as a whole.
Which is why everyone (including Buffett) recommends index funds.

Not to say that you shouldn't experiment, but probably a good idea to keep most of your investments in something sensible.

I suppose that's exactly my way of thinking. 90% in index funds. Experiment!!! WOW. Do you yourself experiment? and if so what %?
I don't drink, so I was thinking maybe saving that. But it just seems like fools gold then to buy any shares.
Is it some Neanderthal, hunting itch that must be fulfilled. Instead of hunting Mammoths were hunting shares?
Pity we couldn't all arrange summer beer meet up, and talk about this stuff, as most people I know just aren't interested in this stuff.

Bubblegun wrote: ↑Fri Jul 08, 2022 2:43 am Do you yourself experiment? and if so what %?

https://www.retirejapan.com/blog/my-inv ... all-wrong/

beanhead wrote: ↑Fri Jul 08, 2022 12:28 am I don't know if it is possible to buy less than 1 stock. I don't think so. For Japanese stocks some brokers now allow you to buy in less than 100 shares, but I don't know if Rakuten has started this yet.

Brokers like PayPay let you buy a YEN amount of a company. Not shares. You pay about 1% for this privilege. Do not use them.