NISA & iDECO for dependent spouse?

TokyoBoglehead
Veteran
Posts: 791
Joined: Thu Jul 07, 2022 10:37 am

Re: NISA & iDECO for dependent spouse?

Post by TokyoBoglehead »

Biketokyo wrote: Thu Sep 01, 2022 9:30 pm Thank you for good points about S&P500 vs global index funds. My thought is since most of our savings in my name are in an S&P index fund with my broker in the US it might make the most sense for my wife’s NISA and iDECO to focus on global index funds. My feeling is that it’s ok if they don’t outperform the S&P500 as long as they are still performing reasonably well and give us (me mostly) a bit of a psychological cushion when worrying about the US. My understanding is that US companies still make up a significant portion of global index funds as well.

Besides concerns that a global index fund might slightly underperform an S&P500 one, is there any other argument against a global index fund since we already have a lot of savings in an S&P500 index fund?
Not really, a few small things.

1. If you consider your shared portfolios, you will most likely always be overweighting the US if you are already invested in US markets. However, this will diminish slowly overtime, and not a major concern.

2. It will be slightly more complicated to sell your assets in retirement and keep things balanced, but this is a very minimal concern.

No one here would every call an S&P500 index fund a bad investment, it is simply more of a bet in US supremacy vs global equities which are an admission of uncertainty. :lol:
Gulliver
Veteran
Posts: 259
Joined: Sun Jun 13, 2021 6:19 am

Re: NISA & iDECO for dependent spouse?

Post by Gulliver »

It would be worthwhile considering all of the above opinions when putting together an individualized investment strategy. The more information you can amass about your options the better. We are lucky to have this form.

Another consideration, that I forgot to add to my advice above, is the “ability to sleep at night” factor. When your head hits your pillow, if it anytime your thoughts turn to: “Am I exposing myself too much risk? Can I afford to lose this money? How are my investments affecting other people around the world?…” then it’s time to rethink things.

Also, I know it’s popular to poo poo bonds right now but even a seemingly meager average 3% return is a fair bit better than the OP’s current 0.0001% :)
Post Reply