Am I doing this right?

[jesusluvr12345]

I’m still very new to all of this, so I’m not sure if I’m doing things right.

What I have done so far - maxed out this year’s NISA with 60% eMaxis Slim S&P 500 and 40% Rakuten VTI.

What I want to do is invest an additional 300k every month in 50% eMaxis Slim S&P 500 and 50% VTI. The yen is sort of weak right now but I am not sure which the currency will move, so I’m planning to invest regularly anyway. Is this a good idea? I’m not getting any currency hedged products because I’m planning to invest long term (10-20 years) and hopefully the currently fluctuations will not have too much of an impact.

I bought some individual stocks too, but I’m not sure if picking and timing stocks is that good of a strategy…

 

[jandolphrohnson]

@jesusluvr12345 Investing consistently and ignoring currency fluctuations is definitely right IMO. No one knows which way the currency may move when.

And yeah low fee index-like funds are the way to go. Unless you're good enough to pick stocks as a full time job, it's not worth picking individual stocks IMO. It sounds like you're weighting the US fairly high and all equities, which are both things that someone could quibble with but not unreasonable choices.

 

[jesusluvr12345]

@jandolphrohnson Thank you. If the JPY does become stronger, I will lose some money in the process. But, at the same time I’ll be able to buy more from global markets, so it balances out to an extent. Is this a good way of looking at things?

 

[jandolphrohnson]

@jesusluvr12345 I mean, if you're sure all your future expenses will be JPY then there's an argument for either hedging or finding JPY-denominated investments. But IME the costs of those outweigh the benefits. Having to take currency risk on your investments sucks (and make no mistake, it's a genuine risk with no real upside), but the alternatives are worse.

 

[victoria37]

@jesusluvr12345 Are you intentionally heavily overweighting the S&P500? Most of the assets in VTI are the S&P500 in the first place, so buying at those ratios is a bit strange.

 

[bigoink]

@victoria37 I doubt it makes much difference given the overlap and correlation between all-US and S&P, but maintaining the 60:40 balance seems like unnecessary effort.

No world stocks? I would be tempted to throw in a few to smooth out currency fluctuations. If you buy say 50% world index and 50% all-US or S&P then you end up with an overweighting of US stock in the order of roughly 80:20.

 

[jesusluvr12345]

@victoria37 I agree that my portfolio is heavily weighted toward the S&P 500. A rebalance is in order. Planning on getting some all-country ETFs. eMAXIS Slim 全世界株式(オール・カントリー) is a good pick, right?

 

[resjudicata]

@jesusluvr12345 What I'll say is that I'm heavy loaded up on this fund because it is a low cost, diversified and reinvesting mutual fund with good historical performance comparable to ^ACWI-Kokusai benchmark index.

Hopefully that answers your question, but I am not going to give you any financial advice regarding making the purchase. Please make that decision yourself.

I'll also add that you're not just heavily weighted in on S&P 500, you're exclusively on USA stocks. $VTI is Total "USA" market ETF. Vanguard's whole world ETF is $VT.

 

[jharrod84]

@jesusluvr12345 I wouldn’t put so much in S&P500 if you’re not a US taxpayer.
Do you want to let the money sit for 20 years?
If yes maybe putting like 30% of the money in a all developed countries stocks fund or even whole world stocks fund would be better to balance the risks?
For the stocks picking it depends a lot if you can read financial data or not imo.
Picking a few dividend aristocrats stocks doesn’t seem to be a bad idea with your kind of budget for example since you seem to want to do buy and hold.

 

[resjudicata]

@jesusluvr12345 Are you a US taxpayer?

 

[jesusluvr12345]

@resjudicata I am not.

 

[pompster2]

@jesusluvr12345 What you could do is invest the same amount in USD every month. This means you invest more when the yen is weak and less when the yen is strong. It’s kinda like a hedge but through investment timing rather than active FX management