Savings, retirement, investments

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gaijinfarmer
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Savings, retirement, investments

Post by gaijinfarmer » Mon Jan 16, 2017 7:19 am

So, you lifers that actually have something left at the end of the month, what do you do with it?

If I were in America I'd transfer the money to an investment account with Vanguard or Fidelity or something similar, and set it to follow the stock market if a recession doesn't seem around the corner.

In Japan, ppl seem to buy into savings plans packaged as products, where you pay money to a company every month, and they pay you back in 5-10-20 years with a little interest, assuming that you made all your payments.

What else is out there, and what is actually respectable as a savings vehicle?

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Zasso Nouka
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Re: Savings, retirement, investments

Post by Zasso Nouka » Tue Jan 17, 2017 6:33 am

How do those savings plans work ? When we had one explained to us at the post office it didn't seem like a good investment opportunity at all, it looked like you pretty much get back what you paid in with only a minuscule increase in value.

What with the recent changes in the tax regulations it now looks like foreign investments are going to become increasingly difficult.

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Re: Savings, retirement, investments

Post by paradoxbox » Wed Jan 18, 2017 1:18 am

keep your investment money overseas, japan is a lost cause if you're thinking of investing in stocks. and don't even consider investing in japanese banks. they -might- be stable, but they're charging you negative interest to keep your money locked up with them, ridiculous

invest your money in american markets. look at how the markets reacted to 2001 and 2008. you think there was a crash? the US stock market laughs at that idea. trying to crash the US market now is like throwing thumb tacks into its arse. if it crashes after you put money into it, just buy some more.
look at this 100 year chart of the dow jones.
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if you have lots of money to invest and want quick returns, i would suggest putting some cash into the dow or nasdaq index - just trade the index, not individual stocks. the dow will probably hit 22,000 before summertime 2017, and the nasdaq is already back to levels it was at in 2000 before the bubble burst, but this time it's all real value instead of pumped up fake companies.

compare that to the nikkei which has been stalled out for about as long as i have been alive
this is why japan is a bad investment choice. you can get dividends and coupons from companies but forget about growing your investment, it will never ever grow. until the generation of people running the current banks dies off (the same people that control the majority shares in most large japanese companies btw, and even when they retire they still control these companies) this will not change no matter how much abenomics or other nonsense politicians whip out of their pants.
nikkei-225-index-historical-chart-data-2017-01-17-macrotrends.png
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if you want to change your life, read the book called Buffettology written by Mary Buffett. If you follow the ideas and principles written in that book you will always invest wisely.

Just make sure you have enough money to invest and don't make investments that will wipe you out if they crash, even good companies can take a big stock price hit sometimes. Make sure your account has enough to handle it, and don't trade on margin.

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Re: Savings, retirement, investments

Post by gaijinfarmer » Tue Jan 24, 2017 7:31 pm

ZN, that's basically what I had been seeing in them too. Grandma here sure is hot on them tho. :/

PB, seems sound advice but I wonder if there will be a downside to Trump as he goes isolationist...

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Re: Savings, retirement, investments

Post by Ian » Tue Jan 31, 2017 9:42 am

Gaijinfarmer,

I put my yen into silver and gold bullion. Helps me sleep very well. :)

If you get into that too, some links to physical shops in Japan and their rates.

Silver and Gold: http://www.ishifuku.co.jp/market/first/map.html
http://www.ishifuku.co.jp/market/price/index.html

Gold: http://gold.mmc.co.jp/shop/direct/
http://gold.mmc.co.jp/market/gold-price/

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Re: Savings, retirement, investments

Post by paradoxbox » Thu Feb 02, 2017 3:56 am

I don't think anything Trump does will affect the US stock market in the way detractors imagine. It (the US stock market) has proven to be extremely resilient, a simple look at the above chart shows that reality - even the destruction of the global economy in 2008 barely put a dent in the dow industrial index, and the dent only lasted a little while. There hasn't been a severe crash since the 20's which says a lot about the stability of things.

Even if Trump secures 8 years as president and manages to ravage the economy (which I do not think will happen), it would merely be a fantastic opportunity to buy into good American companies at cheap prices. Stuff like Coca Cola, Johnson & Johnson, Nike, etc etc. These companies will probably be making billions of dollars long after we're all dead and a quick check of their annual reports will probably always show that they're being managed soundly.


Gold on the other hand, I don't think it's a good investment. Yes it does provide some security because it is a physical asset that you can hold and gold has always held decent value compared to other forms of currency or assets throughout all history, but the price of gold in modern times is generally determined against the USD, and the price has fluctuated hugely. In 2001 you could by 1oz of gold for $360. In 2006 I bought lots of gold via forex and made a killing by selling it all in 2010 and 2011. But the actual amount of gold in the world has not changed and the reserves of gold remaining left on the planet are basically known. So the price fluctuations are pure speculation and do not make a good investment, only a sort of risk hedge if you're into speculation. If the supply of a material is known to everybody then it follows the price of that material should follow a steady increase as the material becomes scarcer, but that is not the case with current gold prices. The price of gold simply swings wildly every time there is uncertainty about the USD or US economy.

If you had bought into gold in 2011 your investment would have dropped by about 1/2 at current prices. I would not be a happy camper. On the other hand if you had invested in mutual funds or simply just tracked a stock index since 2011 your investment would have doubled, and unlike gold, the US stock markets are unlikely to ever experience a severe price crash like gold is susceptible to.

But more importantly, while gold may have had higher returns if you had bought in let's say, 1980, than stocks, you would have also experienced a HUGE roller coaster of prices, with your investment halving on numerous occasions along the way, whereas with stocks your investment would have been steadily increasing the entire time (As the dow chart in my previous post shows). If you look at a historical gold price chart I think it will become clear that the price of gold is like a magician holding a flame in the palm of his hand. Please be careful.

The other thing you need to consider carefully is inflation. Investing in gold will not protect you from inflation, but investing in stocks generally will. Most sound stocks appreciate at a quicker pace than inflation does even in bad years, and inflation in the US has been pretty much in control since the late 80's. Check Warren Buffett's comments on the issue: http://fortune.com/2012/02/09/warren-bu ... and-bonds/

I'm not trying to bash anyone's investment choice if it's gold or whatever - I hope everyone gets rich! I think gold is a neat vehicle for making money via FX but it's not a good investment if you're thinking long term because historically the price is too volatile and it does not track the state of the global economy very well. The current amount of gold available for humans to use on this planet would make a 67 cubic foot block of solid gold. But gold does not do anything except sit there and look pretty. Stocks (and the companies that you OWN when you buy those stocks) are actively working to create more income 24/7 365 days a year.

Here's a favorite little clip of mine of Warren Buffett on gold:



And another. This guy is one of the top 5 richest people in the world but would you guess it, he is a farmer just like us. He lives in Nebraska on a piece of farmland on the same home he has always lived in. He is a very special guy worth listening to.



If you want to get into Japanese stocks I would suggest setting up an RSS feed to scan all IPO's of newly listed Nikkei stocks, or just scan the 四季報 quarterly reports. Bookmark any Japanese company that had an IPO this year and just watch it for a few months. When the price invariably drops, take a look at the details of the company and decide whether or not it's worthy of investment. Be careful of "penny stocks" or "pink slip" stocks as they are manipulated by greasy people.


Another invaluable investment would be a basic education in accounting or at least forensic accounting. There is a course taught by Jules Schwartz floating around on the internet. It's old but the info is priceless and timeless. It can be learned in about a month of study. With the info in a basic accounting course you will be able to quickly determine whether stocks are junk or if they're undervalued and primed to rocket in value.

Other thing I can't recommend is long term government bonds (regardless of the country) because they do not keep up with inflation. Do the math for yourself, in the long run you are actually losing money when the payout is inflation adjusted - you might get lots of cash at the end but your cash will be worth less than it was when you bought the bond.


If you don't mind risk take a look at the carry trade on forex. Interesting currency pairs include USD/NZD, USD/AUD. If you're a real thrill seeker take a look at the Indian rupee. Interest rates are through the roof but the currency is wildly unstable. If you make a highly leveraged trade you could make huge amounts of money on the interest (given a large trade size) but you have to balance that against the risk of the rupee or dollar wildly swinging in value.

a little sub-note. if you really want to get into japanese stocks, when you take a look at a japanese companies' homepage, take a look at the investor relations page. the page will ALWAYS state (by law) the size of the investment capital, the president, and it will almost always state the major partners of the company. if the partner companies include major japanese banks such as mitsui sumitomo, mizuho, mitsubishi UFJ (MUFJ), etc. you should be very wary about the future growth of the company. JP megabanks love stability and shun risk severely. if the company is being propped up by debt from a JP megabank you need to be sure that the ideas the company is pitching are very good ones, and ideally the company should have a low debt ratio. JP banks will easily give money to a company that is likely to remain stable, but will only reluctantly lend money to a company with a higher risk but higher potential reward idea. A company like Tesla would probably not be able to get off the ground in the current JP market, so if you'd like to make a killing on a startup, choose carefully. On the other hand, if you catch wind of an outfit like morgan stanley etc. investing heavily into a japanese stock and killing the liquidity you should watch it carefully because it probably means that it is a strong contender.

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Zasso Nouka
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Re: Savings, retirement, investments

Post by Zasso Nouka » Thu Feb 02, 2017 6:11 am

Thanks Paradoxbox,

Some great points and very interesting videos, what Warren Buffet says really makes sense. I've owned shares back in the UK (as part of a managed fund) and whilst we avoided any risky or unethical options the investment did increase in value year on year, out performing bonds and savings accounts and we were quite pleased with the outcome.

Recently we've been thinking it might be time to start again slowly building up a small portfolio, we're thinking to mostly invest in global American companies given the stability of the US economy but would want to use a Japanese broker to ease the tax situation. Rakuten Securities offer an online option that seems ok, are they any good ? Or if not are there any better online brokerages based in Japan for trading in US stocks, ideally with an English interface as my Kanji is still rubbish.

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Re: Savings, retirement, investments

Post by Ian » Thu Feb 02, 2017 11:42 am

Good points paradoxbox. Thanks.

Have also watched Warren Buffett over the years and like many of his investment ideas. He does have strong views against gold, but less on silver i.e. Berkshire Hathaway was into silver from 1997 to 2006 @ 129.7 million ounces, which was 37 percent of the word’s known silver supply.

ZN - My wife and kids use this site: https://www.monex.co.jp
No English interface though. :doh:

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Re: Savings, retirement, investments

Post by Zasso Nouka » Fri Feb 03, 2017 6:04 am

Thanks Ian,

Duly bookmarked :thumbup:

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Re: Savings, retirement, investments

Post by paradoxbox » Mon Feb 06, 2017 12:24 am

I think there are a few reasons buffett likes silver more than gold. He might not have outright said it but i think one of the reasons is that silver can be outright used in daily life for stuff like eating (cutlery etc). he also has some gold positions but i think they are for the purposes of actually using gold in industrial application rather than forex speculation. as a matter of fact i think USD/AU (gold) speculation became illegal a few years ago, i remember getting an email from my fx broker about it.