With the Japanese stock market slowly shaking off the poor performance of the past few years, more and more people approach me asking how to invest in stocks in Japan. For those truly considering a foray into the Japanese stock market, here are a few tips to consider that might save you money.
1) If possible, set up an online trading account. Japan’s traditional, large brokerages houses all offer online trading (Nomura, Daiwa, Nikko Cordial), but the real bargains in trading fees and account set up costs seem to be with the online upstarts.
Called “Netto Shoken”, the major players are DLJ Direct, Matsui Shoken (Securities), and E-Traden Securities. Kabu.com is also in the game, with its tie-up with the UFJ Banking Group.
2) If you’re looking at more of a long-term hold strategy, why not invest in stocks that offer special rewards or “presents” for stockholders. Owners of Oriental Land Group, the company that owns Tokyo Disneyland, get free tickets to Disneyland in addition to their shares. JAL, ANA, JR East and West and other companies offer discounted travel vouchers for shareholders, depending on the number of shares owned. Some fast-food companies offer Y3000, Y5000, or Y10,000 vouchers for food based on the various classes of stock. Some companies send flowers, food sets, coffee, beer and other gift sets to shareholders. Some brokerages put together special catalogs advertising these services, and it might be worthwhile to have a look. (Note that you must be a shareholder for a certain amount of time before the gifts take effect.) (For the Disneyland deal, check out this explanation in English: http://www.olc.co.jp/en/ir/ir.html.)
3) If you don’t have enough money to buy the minimum required share purchase right away, look into a Ruito (in hiragana). A Ruito (or “mini kabu”) is a “DRIP” style investment plan where you pay a certain amount of money per month to purchase shares of a certain company. While shareholders’ benefits and the companies that offer Ruitos are limited, they do offer a lower-entry way to get into the Japanese stock market.
© 2004 Wendy J. Imura.