My revised long-term investment plan - Reassessing risks and costs.

I have revised my long-term investment plan.

One change is switching the main product from the Nissay Nasdaq100 investment trust to the Total Stock Market ETF. The reason is that through studying a renowned book, it became clear that costs and risks cannot be underestimated. Investment trusts tend to have higher costs compared to ETFs, and when compared to the above products, ETFs are significantly cheaper at 0.2% and 0.03%, about seven times lower. I am uncertain about the future of the exchange rate, but since the SBI bank/securities I use has free exchange fees, I thought it was not a problem. Also, regarding risk indicators, I couldn't help but acknowledge that the Nasdaq100 has a high risk. While its high returns are very attractive and were initially prioritized in the plan, I learned that risk, not return, should be the priority, leading to a change in strategy. Furthermore, VTI provides a sense of security as it allows for diversified investment in almost all U.S. stocks. I realized that in long-term investments, the most important thing is to have a plan that will not lose. I did consider VOO, but opted for VTI because it is cheaper and easier to purchase.

The second change is incorporating the American Ultra Long-Term Treasury Bond ETF, EDV, into the main investment. The reason is its low correlation with the stock market. Despite holding it short term, I felt its movement in inverse correlation with the stock market and could sense its effectiveness. To maintain mental stability and grip strength in long-term investments, I upgraded it to the main investment target.

The third change is the decision to abolish the Health Care and Consumer Goods Sector ETFs, which were selected as sub-investment products, in order to efficiently invest minimal funds. It is determined that the main investment is sufficiently diversified.

In a rough image, holding one-third each of the Japan equity index, American equity index, and American bond index, while separately waiting for the appreciation of cryptocurrencies and gold to enhance deposit capabilities, steadily advancing the main investment.

Below is the revised long-term investment plan considering the above changes.

Pillars of the investment: Starting from February of Reiwa 6, depositing 0.3 million yen monthly until the NISA framework of 18 million yen is filled, and continue depositing as much as possible even after reaching the target amount.

Main investment products

(1) SBI iShares TOPIX Investment Trust

Trust fees are around 0.1133%.

(2) Vanguard Total Stock Market ETF VTI

Expense ratio of 0.03%.

(3) Vanguard Extended Duration Treasury ETF EDV

Expense ratio of 0.06%.

3. Main investment policy (monthly)

(1) Contributing to the NISA account

TOPIX 100,000 yen (credit card payment on the 1st of each month)

(2).Due to insufficient knowledge, I have used up this year's growth investment quota, so I will switch to a regular investment NISA account next year.

VTI equivalent to approximately 100,000 yen (set up one unit each on the 3rd, 13th, and 23rd of every month for regular deposits).

EDV equivalent to approximately 100,000 yen (manually purchased once a month).

4. Existing assets

(1).Old regular investment NISA

S&P500 and others totaling approximately 2.5 million yen are held, and planned to be sold 20 years after the start of investment.

(2).Gold

Holding 1000g, but will sell as needed to invest in the main products.

(3) Cryptocurrency

Currently holding about 30 types of coins with a value of approximately 6 million yen, expected to increase by over 5 times. After the value increases, continue to invest in the above investment targets by cashing out 0.3 million yen worth each month.

5. Reasons for Selecting Investment Targets

(1) TOPIX Index Fund

By avoiding foreign taxes and exchange risks, and investing in the entire TSE, stable index investment that eliminates human arbitrary judgment is possible. It is ideal for long-term investment. Additionally, within stock indexes, the correlation with the movements of American equities is relatively low, which is considered compatible. The reason for excluding Nikkei 225 is that it is not a market capitalization weighted average, and also because periodic stock changes based on human judgment are made.

(2) Total Stock Market ETF

At present, there is no country with economic power to replace the USA. An ETF that can invest in the entire US stock market is an optimal choice for diversified investment due to its low risk, low cost, and high return balance.

(3) American Long-Term Treasury Bond ETF

Long-term government bond returns are relatively low but stable, and they are optimal as a risk hedge against fluctuations in the stock market.

Gold

It is a traditional safe asset, unaffected by stock market uptrends, with prices continuing to rise strongly and value steadily increasing.

Cryptocurrency

It is anticipated that the value of cryptocurrency will increase in the future. However, it is important to carefully monitor the future potential and market trends of each coin, set stop-loss and profit-taking lines, manage emotions rationally, consider tax implications, timely cash out, and convert into other investment opportunities.

Cash Reserves

Always maintain a certain amount of cash reserves to prepare for unexpected events or clear buying opportunities.

6. Investment Mindset

(1) Utilize past successful experiences

As someone bad at investing, I firmly keep in mind that the only success I have achieved is through long-term investment through fixed amount accumulation.

(2) Acquire and update correct knowledge through books and other resources

Always read investment-related books, be aware of mistakes or points to be changed in your plan, and continue to make correct investments by updating your financial literacy to build an optimal portfolio.

(3) Eliminate emotional investing

Execute fixed investments regardless of market trends and minimize emotional influences.

(4) Avoid timing the market

In long-term investment, it is a fact that even professionals have been defeated by index benchmarks. It is crucial for amateurs like myself to understand that trying to time the market is the height of folly.