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All-time highs – 35 years of hurt for Japan — 7IM Short Thoughts

2 min watch

Ben Kumar, Head of Equity Strategy08 Feb 2024

All-time highs in investment markets are more common than you think. They’re a symptom of the fact markets go up over time, and it’s how investors make money.

But if you’re in a market where you haven’t seen an all-time high since the Simpsons was first televised, it isn’t pretty.

Watch now to find out more.

Transcript

Every time a stock market somewhere in the world reaches an all-time high, loads of words are written about it. And the thing is, no individual all-time high is particularly important. It's just a symptom of the fact that markets go up over time. But you do need to make the occasional all-time high in order to deliver a return.

So spare a thought for Japan. The Topix index, the benchmark index over there hasn't made an all-time high since December 1989; 9000 business days. At that time, the Berlin Wall had just fallen. Kylie Minogue and Jason Donovan were top of the charts over here, and a little cartoon called The Simpsons had just launched.

Over that same time period, the FTSE 100 has made about 249 all-time highs. It's not that many, it’s less than the number of Simpsons episodes that have been made. But when you look at the chart, you can see the difference that makes. You need those all-time highs, not very often, but just every now and then, in order to deliver a return.