Debating about lump sum jpn retirement allocations.

[adamu]

Err, yes sorry, I must've added an extra 10 million on there while typing...

[RetireJapan]

Err, yes sorry, I must've added an extra 10 million on there while typing...

I also try to add on an extra ten million every so often: https://retirejapan.gumroad.com/l/YourF ... MillionYen

[shadows]

Perhaps i'm way off the mark but spitballing with a 17M lump sum I felt these tweaked allocations have a solid long term approach. Any thoughts? I mean a guy could fiddle and fart around till blue in the face but where does it end?

Yen/us currency fluctuations
05 eMaxis slim emerging markets equity index
45 eMaxis slim US stock (S&P) (minus 1.2M in maxing 1st NISA)
10 eMaxis slim Global Equity (all country) ** I was hoping global ex-America
05 eMaxis Slim balanced (8-asset equal type)

Non currency fluctuations as far as I know.
10 Nomura J REIT Fund
10 Rakuten U.S. High Dividend Stock index Fund
15 Nikkei 225 index Fund (minus 1.2M in maxing wife's 1st NISA)
===
100

*I believe all dividends roll over in each fund.
** future NISAs topped with new money DCA

Any and all thoughts welcomed, thanks.

[mighty58]

Yen/us currency fluctuations
05 eMaxis slim emerging markets equity index
45 eMaxis slim US stock (S&P) (minus 1.2M in maxing 1st NISA)
10 eMaxis slim Global Equity (all country) ** I was hoping global ex-America
05 eMaxis Slim balanced (8-asset equal type)

Non currency fluctuations as far as I know.
10 Nomura J REIT Fund
10 Rakuten U.S. High Dividend Stock index Fund
15 Nikkei 225 index Fund (minus 1.2M in maxing wife's 1st NISA)

You've got a lot of overlap in these funds. e.g. Emerging is included in Global. US is included in Global. Nikkei 225 is included in Global. And 5 of your picks (Emerging, US, Global, J REIT, and Nikkei 225) are all included in the Balanced fund. So you're essentially buying the same allotments several times over.

Have a look at the prospectus (目論見書) of a fund like the Global all country, and there will be a chart (on one of the first few pages) showing the distribution of holdings by country. The Global (All Country) is currently made up of 61% US stocks, 11% Emerging Countries, and 5% Japan... so a lot of your desired diversification can be achieved by buying just this one fund.

However, if your goal is to get closer to the specific percentages above, you're better off buying each index separately, and avoiding the Global and Balanced funds altogether, as those will simply duplicate your purchases.

Finally, the Rakuten US High Dividend fund, as its underlying investments are US stocks, will be subject to currency fluctuations.

[adamu]

Agree. For stocks you can just pick either a global fund (good choices on the wiki page linked earlier) or a US fund (s&p 500 or total market). No need to get more complicated than that. eMaxis Slim All Country is the favourite here.

The bigger question is stock/fixed income balance. As you are starting pretty late, you're right to be worried about risk. The worst that could happen is you see ¥10M or more vanish right after investing and it never recovering in time for your retirement*. However, you need to take risk to get the reward so probably need at least 50% in stocks.

In the end you are probably looking at 1 or 2 funds. A stock fund, and maybe a bond (or REIT?) fund. You can also consider the state pension a kind of fixed income, when considering the total allocation.

*Actually the worst that can happen is the market drops, then you panic and sell, guaranteeing you lock in the loses. With investing, not selling during a downturn is vital.

[shadows]

ok ok.. thanks guys. You all must be busting a gut and rolling your eyes
Retirejapan, I'm ready to sign up for your ZOOM lessons!!! Count me in if there's still room.

In the mean time it's back to the drawing board while absorbing greatly appreciated comments.

[adamu]

ok ok.. thanks guys. You all must be busting a gut and rolling your eyes

Haha, not really. This kind of thing you kind of have to figure out for yourself. It doesn't matter if somebody tells you what to do if you don't understand *why*. Plus, everyone has their own individual circumstances.

[RetireJapan]

Retirejapan, I'm ready to sign up for your ZOOM lessons!!! Count me in if there's still room.

Thanks!

Current course is full/underway.
Next cohort will start in January: https://retirejapan.gumroad.com/l/YourF ... MillionYen
We'll be having an online conference on November 23rd: https://www.retirejapan.com/rjconf2022/
I do individual coaching: https://www.retirejapan.com/coaching/

But you've probably got enough to go on from this discussion. Keep asking questions here too

[shadows]

howdy, and thanks for all past replies!

I've been sorting and absorbing funds prospectuses scratching my head and looking into my crystal ball including ideas and suggestions offered. As there is no perfect formula, here's where I'm at. Comments and feedback welcomed.

Lump sum % (Long term) con’t

60%
1st Self NISA - *emax Global all country — adding new money annually
1st Wife NISA - *emax Global all country — adding new money annually
Putting the rest into taxable account.
*emax Global all country

20%
*Tawara no road developed country BONDs

Topping up specific US sectors: subject to currency fluctuations and tax implications.
10%
foreign ETF *VGT - info tech
10%
foreign ETF *VHT - health care
=====
100

[shadows]

howdy, and thanks for all past replies!

I've been sorting and absorbing funds prospectuses scratching my head and looking into my crystal ball including ideas and suggestions offered. As there is no perfect formula, here's where I'm at. Comments and feedback welcomed.

Lump sum % (Long term) con’t

60%
1st Self NISA - *emax Global all country — adding new money annually
1st Wife NISA - *emax Global all country — adding new money annually
Putting the rest into taxable account.
*emax Global all country

20%
*Tawara no road developed country BONDs

Topping up specific US sectors: subject to currency fluctuations and tax implications.
10%
foreign ETF *VGT - info tech
10%
foreign ETF *VHT - health care
=====
100

Alright call me chicken, but I can't seem to justify pulling the trigger on this lump sum investment plan with the USD/JPY at 148.7.
Even getting my feet wet and loading up our first 2 NISAs seems silly. I know some say 'just dive in cause you should never time the market' but this volatility is driving me nuts and waiting seems the logical thing to do here....?? Any opinions out there?