G&G Investment Society
Dear G&G Reader,
Black Monday, October 19, 1987, seems like a long, long time ago, doesn't it? The Dow plunged from 2,246 to 1,738, losing a whopping 22% in a single day. Now I'm starting to hear lots of comparisons and concerns that we might be moving towards another 1987-type drop.
I do believe that the U.S. market is headed for more trouble. Yet the Dow is still five times higher today than it was on Black Monday.
The Japanese, however, can't say the same thing about their market.
The Nikkei 225 Average Hits a 26-Year Low
The Nikkei, Japan's equivilent to the US Dow Jones, has lost more than 20% of its value in the last month and is down by more than 40% for the year, capped by a 9.6% one-day loss last week. That put it lower than it was back in October 1982.
Things are so bad in Japan that its new Prime Minister, Taro Aso, described what is happening as "a harsh storm seen only once in 100 years." Aso, who has been in office for less than two months, is combating Japan's economic weakness with an aggressive stimulus package to prop up the stock market and stimulate consumer spending (Does this sound familiar)?
The package includes:
• 2 trillion yen of direct payments to every Japanese household. A family of four will receive a check for 59,454 yen (US$600) to encourage consumer spending.
• 5 trillion yen in new government spending on infrastructure and public works projects.
• 2 trillion yen for a bank rescue payment to encourage small business lending.
• Cutting expressway tolls.
• New tax breaks for mortgage loans.
• Extending a tax cut on capital gains, and tax credits for child and elder care.
Will the Japanese government's stimulus package work? Only time will tell. But I Think There Are Now Plenty of Bargains in the Japanese Stock Market!
If the Dow dropped to its 1982 lows, it would be at 895 today. Yes, 895! But what would you do if the Dow was below 1,000?
Would you sell everything and head for the hills? Or would you consider it to be the buying opportunity of a lifetime? I’'ll tell you what I'd do: Jump in with both feet and Buy, Buy, BUY!
And right now, I'm suggesting that Japan represents a similar opportunity. If you agree, here are:
4 Ways to Invest in Japan
1. Japanese Mutual Funds: There are dozens of no-load mutual funds that invest in Japanese stocks such as
2. Japanese ETFs: If you're more of an exchange traded fund investor, there are several ETFs that focus on Japanese stocks such as
3. Japanese stocks listed in Tokyo: It's easier than you think to invest in Japanese stocks thanks to discount brokers like Ameritrade. You can trade on six different foreign markets, including Japan, at Ameritrade for only $9.95 per trade. You don't have to open a fancy or complicated account either. (let me know if you are interested in opening an account with Ameritrade and I’ll send you a referral link where you’ll get to make your first 500 Trades for free when opening a new account).
4. Japanese stocks listed in the U.S.: You may not realize it, but there are dozens of Japanese stocks that are listed on the New York Stock Exchange or Nasdaq. [Examples include:
If you want the names of the recommendations suggested above, become a G&G Investment Society (GGIS) member and I'll send you my picks along with many more investment opportunities recommended in our GGIS investment portfolio.
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Tax & Financial Consultant, RFC
866-361-3872 toll free fax
"What we learn from history is that people don't learn from history."
LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. Also, please note that due to our commercial relationship with Publc Gold, G&G Associates may receive compensation from a membership purchased at www.publicgold.com/gngpreciousmetals.