Let’s start with the NIKKEI chart taht will be a good guide to understand what we will experience in the next decade…
As you can read in the chart, any intervention by the Japanese bank was not useful to resume the stock index that reflects a very low economic growth rate.
Because it never happened to exit from a deflationary crisis by introducing cash in the economic system. This strategy could work for another kind of crisis, but not for this one.
If you wanted to invest in the japanese market in 1992 (blue cirle), even if you did not buy with the index peak near 40,000 in 1989, what could you get? You would have obtained that the value of the investment would strongly swing, with temporary loss up to 50%, and today, after 25 years would be still the same!
Or maybe you would have sold out for fear.
A simple example to explain:
The ‘X’ company makes one million euros profit in 2016, the same in 2017, in 2018, in 2019…
The company holder is satisfied earning every year one million euros and the employees have their salary too. But the ‘X’ company stock price will not increase because there is not company profit gain. The market can not pay more for that stock.
Actually the stock price will swing because of the speculation effect, thus switching between raise situation when the investors are optimistic, and reduction situation when the thought is that the company profit is the same as the year before.