Japan’s Recession – Does It Matter?

Japan’s Recession – Does It Matter?

Greetings today is Friday February 16th 2024 and one of my main tasks today is to put the finishing touches on the slides for next Tuesday’s economic update webinar that I’ve been asked to give to Reagan Madison if you are available at 12 noon eastern time we’d

Love to have you join us on that webinar I’ll put the registration in the comments section however I want to show you something that I stumbled on yesterday you can find this from several different sources I’ve got the AP News website on the screen right now and you

Can see that Japan slipped into recession and they lost their spot as the world’s third largest economy I’ve been doing this now for more than 25 years so I’m well aware that clients are always concerned about whether or not a recession is coming uh but the reality

Is I want to use this as an example of why we have to be careful about what we read in the news and also why we have to be very careful about using some of this economic data uh in order to make investing decisions first of all Japan

Is not the only economy that fell into recession in 2023 uh based upon some of the data that we’re seeing again now we’ve got a couple clippings from Reuters this again is from yesterday again Japan unexpectedly that’s a key word unexpectedly slips into recession and

Then take a look at the bottom right the United Kingdom also falls into recession so let’s take a look at the stock chart in particular we’re going to look at the Japanese Nik Index this is the most widely followed um measure for the Japanese stock market and right now on

The screen I’ve got 2022 through present day now let’s add a color bar to the chart to show when this recession actually took place the data is suggesting that the Japanese economy fell into recession in the third and fourth quarter of 2023 the question is is that declaration actually helpful I

Would argue no um cuz take a look at where the Japanese stock market is today and I’m going to zero in on that that’s uh important in just a second but take a look at this if you’ve been investing in the Japanese economy if you’re a Japanese investor holding through this

Period the fact that now February 15 February 16 we’re getting news that the Japan Japanese economy was in a recession did that help you through this time period no the answer is no it didn’t zooming out now we’re adding data going all the way back to 1985 and what

I really want you to see is look at the peak of where we’re at right now in comparison to the January 1990 Peak yes it took the Japanese stock market that long to reach the highs from January of 1990 so the question is is this declaration that the Japanese economy

Was in recession in in the third and fourth quarter of last year is that helpful if you are an investor in the Japanese stock market today I would argue no because if you go back and you look at now we’re zooming in this is just 2023 here this is that recessionary

Period And if you’re invested in the Japanese stock market and you see that news cliping you might be concerned hey the Japanese stock market or the Japanese economy is in recession that declaration is in the rearview mirror ultimately this is why we want you to be

Careful about what you read in the news and what decision you make from that information again the Japanese economy was in a recession last year but is that important right now I would argue no the Japanese stock market is very attractive it is at all-time highs that’ll do it

For today we do hope you find these videos helpful if you have any questions by all means reach out to us until next time thanks for watching

The Japanese economy apparently fell into a recession in 2023. Does that declaration, being published in mid-February 2024, matter?

We would argue “no”.

Today’s video explains why.

#economics #japan #stockmarket #investing #activemanagement

This information is intended to be educational. Hicks & Associates Wealth Management does not provide tax or legal advice. You should consult with a qualified tax, legal or financial professional before making any decisions.

Investment advisory services are offered through Hicks & Associates Wealth Management, LLC (“Hicks & Associates”), an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. More information about Hicks & Associates can be found in Form ADV Part 2 or Form CRS which is available on our website.

Past performance is no guarantee of future returns. Hicks & Associates reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The visuals shown are for illustrative purposes only and do not guarantee success or certain level of performance. This material contains projections, forecasts, estimates, beliefs and similar information (“forward looking information”). Forward looking information is subject to inherent uncertainties and qualifications and is based on numerous assumptions, in each case whether or not identified herein.

This information may be taken, in part, from external sources. We believe these external sources to be reliable, but no warranty is made as to accuracy. This material is not financial advice or an offer to sell any product. There is no guarantee of the future performance of any Hicks & Associates portfolio. The investment strategies discussed may not be suitable for all investors. Before investing, consider your investment objectives and Hicks & Associates charges and expenses. All investment strategies have the potential for profit or loss.