Japanese Stock Market Crash & the Fear we Indians live in | Worst Case Scenario for Stocks

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The Japanese stock markets crash from 39,000 points to a low of 7,800 points - a drop of over 80%. And although a majority of Indian investors have never invested in the Nikkei, many of them quote that incident as their reason for never investing in equities. It's like the worst-case scenario of investing and in this short video, I look beyond the story and examine the numbers since that fall. More specifically, I reveal 3 truths -
a) when I include dividends and reinvest those dividends, then the Nikkei 225 is not 28% down but is actually 14% up
b) if instead of lumpsum investor, I have done an SIP (systematic investment plan) in the Nikkei 225 from December 1989 onwards, then I would be at a CAGR of 5.1% (as of Dec 2021)
c) Unlike a country like India, Japan has an ultra low inflation rate of 2%. In that context, the real returns from the Japanese stock market is a respectable 3.1%

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Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented

[lordrdx]

Exceptionally crisp & informative short!

[Sachin]

No Youtuber can tell this, you are well researched

[keerthi]

Thank you. I had this doubt for a long time that if India were to somehow go with long periods of close to zero interest rates, very low inflation, and demographic decline at the same time, would it decimate equity investments.

[GowthamRaghavanR]

Past three months the question was running in my mind... Thank you

[sanathkumard.k.]

Thanks for the informative video. Even I had the same doubt about Japanese stock market.

[geramer]

Good insight to know. This fact did bother me but I always thought of this as exception

[Dr.Gokoul]

How to invest in Japanese stocks bro which platform

[abhipillai]

Sir i would like to suggest one point. Nikkei was overvalued in 1989 almost 4 times. Average p/e of world was 15 while nikkei was at p/e of 60. If we consider it overvalued, nikkei should have been around 10000 points if we consider world averages. Actually it has risen from 10000 to whatever value it is today. Please correct If i am wrong about this fact. Thank you.

[MandeepSingh-pkmn]

Thanks a lot for this information. As this was my question also.

[anujoybardhan]

Well the worst was probably the US in 1929, the SP500 recovered to the level it had been in 1929 only by 1955....that's quite hard...

[JatinMakwana]

Good job at educating new investors with sheer facts👍🏻

[shreyansjain]

Thank you for sharing the information. Just wanted to clarify 2 points:
1. When you say the index is 14% up, does that mean someone who invested prior to 1989 (say 1988), their net returns is 14% in approximately 30-35 years?
2. When you say the CAGR is 5.1%, does it factor in the losses due to the crash in 1989?

[meghanaabhyankar]

Would it have been better if an investor was rebalancing periodically?

[nikhilgatagat]

Nobody asks why japan inflation is 2 percent

[cyowpbg]

How to invest in Japanese stock market

[arifhussain]

Can you please make a video on how the share price moves with simple examples?
What drives the share price& how bulk of block deals are placed?

[ankitkhanna]

How to invest in Japanese stocks from India?

[Dheerajkumar-gxty]

Saw yr last video sir ❤ur super kool, my question is :- shod I invest as sip on a momentum fund or lump sump..
Specifically fr momentum is my question as there r now only two good momentum funds..
Sir whatever the option u choose why would tht b better than the other, I would invest fr sure
Thank 🙏u keep ⭐✨us enlightened thank u again

[joydeep_]

Sir i took ET money for the whole of last year. I made pathetic returns. Just wish you made a better product. 😢

[Sachin]

Can you make an entire video on Japan and Plaza Accord