By 
The critical stock index and an excellent barometer of the economy of Japan are the Nikkei 225 Stock Average. It evaluates the performance of 225 large companies in the country and includes a number of industries. It is considered to be Japan’s equivalent to the Dow Jones Average, with the best-performing 225 blue-chip organizations enlisted in the Tokyo Stock Exchange. Note you cannot invest in an index directly. However, you can gain exposure to its underlying stocks in the Nikkei 225 through an ETF or exchange-traded fund.
Kavan Choksi Japan – an insight into the performance background of the Nikkei 225 Stock Average
Kavan Choksi Japan, is a leading investor and expert in finance, economics, and business management. He says that The Nikkei 225 needs to correctly show you how the stock averages exponentially or steadily grow. It attained a historic high on the 29th of December, 1989, of 38,957.44 intraday before it closed at 38,915.87. Through the whole decade, though it grew around six-fold, it dropped the gains. Again, on the 10th of March, 2009, it closed at 7,054, which was 81.9% and well below the peak it attained in 1989.
Drop in points
He says that after two days of a massive earthquake in Japan that almost destroyed its northeast region on the 15th of March 2011, the Nikkei again dropped over 10% to 8,605.15 points; this was a 1,015- points drop. The Index continued to fall the whole year, and it reached a low of 8,160 on the 25th of November that year. Again, it further dropped to over 17% and finished at 8,455.35, representing the lowest price for the year-end in more than thirty years. On the 18th of May 2021, the Nikkei 225 Index was placed at 28,406.84.
The Index is like the Dow Jones Industrial Average in the USA
The Nikkei 225 Stock Average is similar to the Dow Jones Industrial Average as it is an equity index that is price-weighted in nature. The company ranks on this Index are determined by the prices of stocks that is different from the other key indexes in the globe where market capitalization is taken for calculations.
Investing in Nikkei 225
Purchasing and managing an individual stock in this Index is expensive and not feasible, as there are substantial implications in taxes. However, individual investors can reap advantages from this Index via exchange-traded funds, generally known as ETFs, whose fundamental asset classes correlate to this Index.
Kavan Choksi Japan states that ETFs are not the same as mutual funds as they are priced at the close of the day. They are traded throughout the whole day, and their prices change like the stock market. However, the individual investor offers diversification via one investment. Moreover, they are more affordable than funds that are actively managed. Hence, they are a better option than the regular ones. Many ETFs track the trade of the Nikkei 225 on the Tokyo Stock Exchange in order to get the desired results.
Comments