RetireJapan

What are our US members doing to invest? Are you all investing in the US using existing accounts/Interactive Brokers/Ameritrade? Or are you using Japanese brokers?

If you are using Japanese brokers, what are you buying? It is my understanding that Japan-listed mutual funds and ETFs are out, because IRS. I heard that US stocks might be out, because financial reporting??? Are you restricted to individual Japanese stocks?

Trying to get a better idea, and it would be nice to have a thread to direct people to

I use schwab, but was grandfathered in--got the account while it was still possible to open one from here. I'm very happy with it--all trades are now free, execution is immediate and immediately visible (eg., mkt order). They provide research reports from the likes of morningstar, argus, CFRA, and ned davis, in addition to their own. Phone service is available 24/7, if a rep can't help with something they'll connect you to a broker. With the exception of monthly statements (which I keep for taxes here), I've gone paperless. As with other US brokers, you can connect to them via TurboTax and all trades/dividends/interest flow into your US tax return in 15-30 seconds. Their debit card is also good--excellent f/x rates, and no fees even internationally. 2FA login, and another optional security step or two if you want to set that up. Wire transfers from here go thru without any intermediary or receiving bank fees (free).

Best advice I could give to a US person thinking of coming to Japan: set up a schwab account well before you leave.

I agree with captainspoke about Schwab. I used them and also was grandfathered for my account at Fidelity and effectively also for Vanguard. I also was able to open an account with TDAmeritrade about 5 years ago from Japan with minimal difficulty. In addition I have a bank account at Wells Fargo. My experience is:

1. Just as captainspoke wrote, having the account set-up before you move to Japan is a good idea.

2. I've never moved money from the US to Japan but have to move it from Japan to the US frequently both to fund those accounts and to pay for things in the US (taxes, college tuition, some living expenses for parents, etc.). Having that Wells Fargo account is a great help because it can be linked electronically to the IRS and college payment systems. I use a bank account at Prestia for the online transfers and don't have to pay a transaction fee. The exchange rate seems okay.

3. None of the US brokerages will sell me mutual funds because I live in Japan. They did originally but stopped some (10?) years ago. They will sell me ETF shares and I buy some individual stocks.

4. I use the December 31 statement from my US brokerage firms to show what the end-of-year account value is on the asset form the Japanese authorities want, and the 1099 form to show dividends and capital losses/gains.

5. There is one important tax disadvantage to the US accounts. Capital losses cannot be applied against dividend income on Japanese tax returns unless they are handled in a Japanese brokerage. Tax loss harvesting through similar ETF's can be an important tax strategy (especially in a year like this one) but you don't have the full benefit if your account is overseas (based outside Japan). For this reason I am looking in to doing more purchasing of US-based ETF's through my Nomura account despite the higher transaction fees.

6. I still have some Japanese accounts (Nomura, SMBC) which I had to start because of my employer and then used as the basis to start NISA accounts. I don't buy any of the nice eMaxis series everyone posts about because of that awful US PFIC rule but I have bought individual Japanese stocks.

7. I feel a little nervous about sudden changes in the policies for these US brokerages that could mean they close my account. Didn't Schwab recently close all their accounts for US citizens living the UK? When I saw recently that someone on this site had trouble starting a TD Ameritrade account from here it made me worried that they might have changed (although another poster mentioned they could set up the account by snail mail). Vanguard has great funds but can be especially customer unfriendly and I worry about how they might change.

Probably shouldn't say this out loud, but I wonder how big the market is for Japan-resident US-citizens looking for easy and sensible investment opportunities

adamu wrote: ↑Fri Jun 05, 2020 1:02 pm Probably shouldn't say this out loud, but I wonder how big the market is for Japan-resident US-citizens looking for easy and sensible investment opportunities

The market is getting smaller by the day and can’t increase because no one from the US is allowed in.

adamu wrote: ↑Fri Jun 05, 2020 1:02 pm Probably shouldn't say this out loud, but I wonder how big the market is for Japan-resident US-citizens looking for easy and sensible investment opportunities

That's what the brokerages have thought when they balance hoops they have to jump thru in order to do biz with US persons here!

TokyoWart wrote: ↑Fri Jun 05, 2020 11:12 am...
3. None of the US brokerages will sell me mutual funds because I live in Japan. They did originally but stopped some (10?) years ago. They will sell me ETF shares and I buy some individual stocks.
...

Even after just now googling around, I can't understand why mutual funds might still be useful, or even attractive. The only thing I can see is automated investing--that a customer could regularly kick some money into a fund (eg., monthly).

Otherwise, it seems like a choice between tap water (mutual funds) vs bottled (ETFs), except in this case the bottled water is cheaper, besides tasting better and being cleaner.

Sorry for the mini rant!

captainspoke wrote: ↑Sat Jun 06, 2020 11:11 am Even after just now googling around, I can't understand why mutual funds might still be useful, or even attractive.

Do you mean in the context of a US investor, or in general? If in general, there have been a bunch of discussions here, but happy to explain my thinking at least. If US-specific, then I have no idea.

I have a TD Ameritrade Account that I opened when living the US. Does anyone know for sure that they will let to continue to use it once I notify them that I live in Japan and change my address? I'm thinking of opening an Interactive Brokers account if they will force me to close the account.

randomguyinjapan wrote: ↑Wed Jul 08, 2020 3:01 am I have a TD Ameritrade Account that I opened when living the US. Does anyone know for sure that they will let to continue to use it once I notify them that I live in Japan and change my address? I'm thinking of opening an Interactive Brokers account if they will force me to close the account.

I currently have a TD Ameritrade account and they know I live in Japan.