Markets
Abenomics: Japan’s Dangerous Experiment
Abenomics: Japan’s Dangerous Experiment
Shinzō Abe, Japan’s prime minister, set out in early 2013 to rejuvenate Japan’s struggling economy with a $116 billion stimulus package, structural reforms, and $1.4 trillion of very loose monetary easing.
In anticipation of the effects, Japan’s stock market surged. By May 2013, the stock market had risen by 55%, but these early indications turned out to be premature.
Up until this point, it seems that Abenomics has not done much for the real growth of Japan’s economy, despite temporary boosts that were a consequence of optimism. As Bloomberg columnist, William Pesek, puts it, “so far, Abenomics has meant lots of stimulus and no deregulation, a recipe that has boosted inflation more than growth or confidence.”
Another problem: the Japanese economy shrank by 6.8% during Q2 on an annualized basis. This was the direct result of a drop in consumer spending (~5% drop), brought on by an increase in sales tax. Japanese consumers scrambled to buy and hoard in Q1, before the new tax kicked in and cost of acquisition rose by 3%.
Abenomics has so far been a disappointment. The world’s eyes are on Japan and we’re rooting for them. After all, the nation is the world’s third largest economy and global economics is an interdependent ecosystem.
Original infographic from: UK Saxo Markets
Markets
Charted: What are Retail Investors Interested in Buying in 2023?
What key themes and strategies are retail investors looking at for the rest of 2023? Preview: AI is a popular choice.
Charted: Retail Investors’ Top Picks for 2023
U.S. retail investors, enticed by a brief pause in the interest rate cycle, came roaring back in the early summer. But what are their investment priorities for the second half of 2023?
We visualized the data from Public’s 2023 Retail Investor Report, which surveyed 1,005 retail investors on their platform, asking “which investment strategy or themes are you interested in as part of your overall investment strategy?”
Survey respondents ticked all the options that applied to them, thus their response percentages do not sum to 100%.
Where Are Retail Investors Putting Their Money?
By far the most popular strategy for retail investors is dividend investing with 50% of the respondents selecting it as something they’re interested in.
Dividends can help supplement incomes and come with tax benefits (especially for lower income investors or if the dividend is paid out into a tax-deferred account), and can be a popular choice during more inflationary times.
| Investment Strategy | Percent of Respondents |
|---|---|
| Dividend Investing | 50% |
| Artificial Intelligence | 36% |
| Total Stock Market Index | 36% |
| Renewable Energy | 33% |
| Big Tech | 31% |
| Treasuries (T-Bills) | 31% |
| Electric Vehicles | 27% |
| Large Cap | 26% |
| Small Cap | 24% |
| Emerging Markets | 23% |
| Real Estate | 23% |
| Gold & Precious Metals | 23% |
| Mid Cap | 19% |
| Inflation Protection | 13% |
| Commodities | 12% |
Meanwhile, the hype around AI hasn’t faded, with 36% of the respondents saying they’d be interested in investing in the theme—including juggernaut chipmaker Nvidia. This is tied for second place with Total Stock Market Index investing.
Treasury Bills (30%) represent the safety anchoring of the portfolio but the ongoing climate crisis is also on investors’ minds with Renewable Energy (33%) and EVs (27%) scoring fairly high on the interest list.
Commodities and Inflation-Protection stocks on the other hand have fallen out of favor.
Come on Barbie, Let’s Go Party…
Another interesting takeaway pulled from the survey is how conversations about prevailing companies—or the buzz around them—are influencing trades. The platform found that public investors in Mattel increased 6.6 times after the success of the ‘Barbie’ movie.
Bud Light also saw a 1.5x increase in retail investors, despite receiving negative attention from their fans after the company did a beer promotion campaign with trans influencer Dylan Mulvaney.
Given the origin story of a large chunk of American retail investors revolves around GameStop and AMC, these insights aren’t new, but they do reveal a persisting trend.
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