# Japanese ETF



## dogpower (Feb 11, 2013)

Hi

I'm deciding to invest in a japanese ETF. Does anyone think that its a good idea, or do people think I missed out on Japan's big run. With Abe so dead set on lowering the value of the Japanese yen, I think Japanese stocks still have some room to run, however I am really unfamiliar with the Japanese economy.

Deciding on either DXJ or CJP

CJP is ishares canadian hedged japanese index fund.

DXJ is wisdom tree japan hedged equity fund hedged against the U.S dollar.

Leaning towards one that is hedged against the Canadian dollar due to relative ease in buying. Regardless, I wouldn't have it in my TFSA or RRSP if I decide to buy. Hedged because I am expecting the Japanese yen to drop.

The MER is 0.44 to DXJ and 0.74? for CJP. Growth relatively the same in the past 6 months.

Unsure of how else to compare the two ETFs. I'm looking at this short term, say 1-2 years because long term Japan has problems that need to be addressed.

Hoping for some feedback and thanks guys in advance.


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## GoldStone (Mar 6, 2011)

What's your view on USD/CAD exchange rate?

If you think that USD will be stronger, buy DXJ.
If you think that CAD will be stronger, buy CJP.

MER difference doesn't matter since you are looking at this as a short term trade.

As to the whole idea of investing in Japan... I have no idea what's going to happen there. It's not at all certain that Abenomics will succeed. Their main problem is chronic deflation. The root cause of deflation is poor demographics. They can't change demographics by devaluing currency. If and when the signs appear that Abenomics is failing, their stock market will likely collapse.

Also, I've seen articles saying that sudden yen devaluation can trigger international financial crisis, similar to the Asian currency crisis in 1997. Not sure if it's a valid concern or not.

Don't bet more than you can afford to lose.


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## CanadianCapitalist (Mar 31, 2009)

Looks like you want to chase performance.


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## My Own Advisor (Sep 24, 2012)

Why not buy VXUS ETF and get 13% Japan and another 18% in other Asian countries (developed and emerging)?

http://etfdb.com/etf/VXUS/holdings/


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## dogpower (Feb 11, 2013)

You guys raise good points. 

I'm expecting the Canadian dollar to drop relative to the U.S, but remain roughly on par with the U.S for at least a year - this is what JP morgan says.

However, I then have to exchange my Canadian dollars for U.S dollars which I find to be a hassle and then I'm also betting that the Canadian dollar will be lower than the U.S.

I already have stocks in a TD international index. I'm also putting money in indexes -canadian couch potato style. Its a big aggravating to see the Japanese index jump up 60-70% in 6 months and be outside of it.

Sounds like a bubble waiting to pop - but I also feel that Abenomics is just getting started.

I would never invest money in this stock that I wouldn't feel comfortable losing. I was thinking at most $2000 here.


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## GoldStone (Mar 6, 2011)

dogpower said:


> I already have stocks in a TD international index. I'm also putting money in indexes -canadian couch potato style. Its a big aggravating to see the Japanese index jump up 60-70% in 6 months and be outside of it.


TD International is 22% Japan. You are not left out in the cold.

BTW, Greece is up 39% in one month. Maybe you should buy that.


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## humble_pie (Jun 7, 2009)

wasn't there a thread about greek banks that trade stateside as adrs or adss

no wait, it was irish banks


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## GoldStone (Mar 6, 2011)

National Bank of Greece has an ADR. NYSE:NBG

1d: +19.5%
5d: +82.5%
1m: +254%


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## humble_pie (Jun 7, 2009)

so?

did u?


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## GoldStone (Mar 6, 2011)

*όχι*


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## humble_pie (Jun 7, 2009)

γιατί όχι;


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## GoldStone (Mar 6, 2011)

Bernard Baruch’s Investment Rule #1

Don't speculate unless you can make it a full-time job.


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## dogpower (Feb 11, 2013)

GoldStone said:


> TD International is 22% Japan. You are not left out in the cold.
> 
> BTW, Greece is up 39% in one month. Maybe you should buy that.


.....I didn't want to bring it up, but I did invest in national bank of greece. I was looking to invest when it was 0.70 and then finally decided to put $500 U.S when it was at 1.56 so I made 43% in like two days. Europe is still in bad shape, but I felt like if NBG collapsed and the Euro allowed that, then I should be more worried about my other stocks in general rather than $500. 

Complete gamble I know and got lucky. The majority of my money is in indexes but there is just something when you pick a stock that makes crazy gains.

I'm only thinking so small purchases so if I lose my money I can just take it as a lesson learnt. 

I am taking everyone's advice seriously here and will give it some time to mull over. I do have exposure to Japan through my international index and never thought about that.

I speculate because I don't really understand stocks and economics. I'm still new to investing. The majority of my money is either in indexes or cash at the moment.


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## mrPPincer (Nov 21, 2011)

If your td international index isn't already the e-series version I'd suggest converting it.
TDB907 is the e-series Japan index fund, no trading fees, with an MER* of 0.52 versus DXJ's 0.48 and CJP's 0.72, so cheaper than either when you consider trading fees, and easier; you can trade in and out with small amounts, and your tax info would be on the same T3 as your other e-series, but it's not hedged.
*
http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=52609
http://www.wisdomtree.com/etfs/fund-details.aspx?etfid=18#overview
http://ca.ishares.com/product_info/fund/overview/CJP.htm

Personally, I agree with CC when he said it looks like you're chasing returns; so far this year I've locked in thousands of dollars in gains selling TDB907, just in my regular rebalancing, and will buy only when it drops in relation to my other equity & cash allocations.

I won't second guess your speculations because I have no idea how things will play out or when, but I'd suggest to continue keeping the bulk of your investments well diversified in cash & the index equities as you are, best of luck!


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## dogpower (Feb 11, 2013)

Sounds good.

I think I may just continue investing in my indexes for now.


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## james4beach (Nov 15, 2012)

Many people (myself included) speculate in stocks and ETFs, then after a few years of doing this, crunch the numbers and discover that they would have in fact been better off just sitting in cash or GICs the whole time.


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## dogpower (Feb 11, 2013)

I started investing in feb. I'm realizing that my passive index investing is way way better than my stock choices. Not only that, but NBG is down like 40% because of some stock splitting? thing going on.


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## GoldStone (Mar 6, 2011)

Japan dropped 7% overnight.

OP: hopefully you stayed away from the Japanese ETFs.


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## mrPPincer (Nov 21, 2011)

GoldStone said:


> Japan dropped 7% overnight.
> 
> OP: hopefully you stayed away from the Japanese ETFs.


agreed, I was thinking of this thread too when I heard this morning.


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## GoldStone (Mar 6, 2011)

Good read:

http://allstarcharts.com/nikkei-crashola/


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## andrewf (Mar 1, 2010)

One day blip... Japan's market is now back into a reasonable valuation range after grinding lower for 20 years. Japan is probably a better buy now than the S&P500.


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## GoldStone (Mar 6, 2011)

andrewf said:


> One day blip... Japan's market is now back into a reasonable valuation range after grinding lower for 20 years. Japan is probably a better buy now than the S&P500.


Put your money where your mouth is. Buy Japan today. Post a snapshot of your filled order here.


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## mrPPincer (Nov 21, 2011)

The Jun 13 Nikkei futures are still dropping right now, they went down from -210 when I checked earlier to -270 and now to -290. It was from 14550 at opening to 14300 as of 9:30 EST, so it might be more than a one day blip.
Two day blip?

edit: I may have spoke too soon, looks like the futures are climbing back up a bit again


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## humble_pie (Jun 7, 2009)

gold was this the thread where we were talking about japan & nat bank of greece?

never mind japan. The NBG news seems to be skewed. Stk is trading now around 1.20-1.25.

but the bank is issuing 2.27 billion new shares for euro equivalent of USD 5.50/sh, along with reverse splitting 10/1.

so today's 1.22 share - theoretically speaking - should rapidly trade down to around USD .55 by new issue closing date.

hmmmn the market seems to be saying that either the new issue was priced far too ridiculous cheap or else share price will soon be timber-r-r-r-r-r.


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## andrewf (Mar 1, 2010)

GoldStone said:


> Put your money where your mouth is. Buy Japan today. Post a snapshot of your filled order here.


I hold Japan in VEA, and I am fully invested currently, so no extra cash to deploy. I am very comfortable with my VEA allocation.


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## doctrine (Sep 30, 2011)

Does anyone know the averagae P/E of stocks on the Nikkei Index? That should determine whether you invest in it or not, not recent performance. If it's above 20, stay away.


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## MoreMiles (Apr 20, 2011)

Nikkei dropped 3% at opening tonight. So Japanese market had its 10% correction in 3 trading sessions. Is it ready to move up again? Like everyone here waiting for US markets to make that correction and rush into buy on dips, I wonder if there are people planning to do the same for Japanese stocks.


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## mrPPincer (Nov 21, 2011)

I don't know what the P/E ratio is now, but the nikkei hasn't dropped all that much in comparison to it's recent run-up.
I've sold thousands worth of TDB907 on the way up in the past few months, and it only took $570 invested back in during the correction thurs & fri to keep to my allocation.
If it's another 3% down now and the futures are still down monday afternoon I might buy another $100 or so more, no big deal so far.


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## GoldStone (Mar 6, 2011)

I think it's too early to tell.

1. Japanese market is up 60% in the last 6 months. It went too far too fast. 10% correction may be not enough to cool things down.
2. Japanese ETFs experienced big inflows in the last few weeks before the correction. Those people are now under water. Some of them will be looking to get out to limit their losses. That creates selling pressure.


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## Belguy (May 24, 2010)

http://www.nytimes.com/2013/05/31/b...5-with-market-uncertain-over-growth.html?_r=0

Oh, oh!!!:hopelessness::cower::eek2::eek-new:


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