Finance SLP5 Essay Example | Topics and Well Written Essays - 500 words

Finance SLP5 - Essay Example The average Japanese stock pays less than one percent in annual dividends per year (Norris, 1995). In Japan the overall sad state of the economy has gotten better during 2008. The country had endured a 15 year span of basically no economic growth and was stuck in a climate that felt like a constant recession. The stock market completely bottom out, but finally there is light at the end of the tunnel. The fourth quarter numbers for 2007 demonstrate an economy on the rise, if the benchmark of GDP was annualized it reflects a Japanese annual economic growth of 3.7% (Hutchinson, 2008). The economy is one of the most influential factors in the behavior of a country’s stock market behavior. Despite that fact last year was another bad year for Japanese stocks. The SPDR Russell / Nomura index which reflects the value of smaller companies dropped 30% altogether last year (Hutchinson, 2008). The stock market in Japan is extremely risky. If an econometric statistical analyst was perform I’m sure the Beta coefficient for the marketplace is extremely high. There is still lots of uncertaintly over the long term performance of the Japanese stock market. The yen during the last year has not done well and has lost purchasing power against the dollar which is bad sign for Japanese stocks. Investing in a marketplace with high level of risk has its advantages for sophisticated and smart investor that can find hidden gems within all the chaos. It is basic economic that with high risk come high rewards which means that in stock market such the Japanese stock market there are great short gains to be made in many stocks in the marketplace. I would personally invest in the Japanese stock market place. As stated earlier there are opportunities to find high yield stocks in such a market. The smart move is to diversify and include a portfolio of blue chip U.S. stocks when attempting to make money in high risk