Let’s imagine you want to build a house, and for whatever reason, you cannot afford the materials and labour to do so.
You come up with an alternative way of building your home: buying other houses throughout the years as real estate prices go down.
This guide will help you learn more concerning your investment in Japanese stocks because, similar to buying a house, investing in the stock market requires significant financial commitments.
If we start from the beginning, we’ll need to explain some basic terms before we continue ahead – it may sound tedious but go along with me – I promise not to bore you too much!
We’ll need a broker (we won’t be getting into details about how exactly they work). They will help you buy and sell stocks.
We need to mention that stocks are pieces of businesses, giving you a portion of their earnings (dividends).
The stock prices fluctuate depending on how the company is doing, its profitability, the economy and lots of other factors. So when you invest in stocks, you’re essentially investing in these companies.
Good Investment Companies
Now that we have those basics out of the way let’s move on to picking good Japanese stocks to invest in!
Here is a list, but this is not an exhaustive list, so do your research before deciding.
- Toyota Motor Corporation (ADR) (NYSE: TM)
- SoftBank Group Corp (ADR) (OTCMKTS: SFTBF)
- KDDI Corporation (ADR) (OTCMKTS: KDDIF)
- Canon Inc. (NYSE: CAJ)
- Nintendo Co., Ltd,
- Sony Corporation,
- Sharp Corporation,
- Panasonic Corporation.
You can invest in these large companies, and they all have a large variety of share classes listed on the NYSE and Tokyo Stock Exchange markets.
The stock exchanges I mentioned there are where all stocks from different companies are traded, which is why you might see some of them listed as only trading on one market.
As a beginner, it is advised that you stick to Japanese stocks that trade on both markets, as this will give you a better idea of their overall worth.
How to Invest?
Now that we know what stocks to invest in, how do we go about doing it? Your broker will more than likely help you through the entire process, but I’ll outline the basics for you below, just in case.
Firstly, find a company whose stock you’re interested in buying, then look up its symbol. A unique code is assigned to it, which makes it easier to track.
Once you have the emblem, head over to your broker’s website or app and type it in, you should then see information such as the current price, how much it’s changed over the past day/week/month and lots of other data which will help you decide on whether to buy or not.
You can set up alerts to notify you when the stock reaches a specific price point, so you don’t constantly check the markets.
Assuming you’ve decided to buy, all you need to do is enter the number of shares you wish to purchase, and your broker will take care of the rest.
They’ll automatically buy as close to that amount as possible at the best available price and then charge you a commission on top (this varies from broker to broker but is usually around $5-$10 per trade).
Now that you know how to invest in Japanese stocks, where should you store them? There are several options out there, but your broker will probably have their own, so I’d recommend using them.
All you need to do is open an account, deposit your money, and choose the stocks you want to invest in.
Remember, it’s essential only to invest money you can afford to lose. This is a risky investment, so make sure you understand the risks before diving in. If you’re still unsure, talk to a financial advisor for more advice.