Japan's Plea To Millennials: Please Buy Stocks

Tyler Durden's picture

Ever since the Federal Reserve first got into the business of blowing massive equity bubbles back in the 1980's, Americans have shown a willingness to happily, if ignorantly, embrace each successive iteration to the rigged market.  Of course, as E-Trade recently confirmed via the following ad, making money in equities is a very simple two-step process: (1) get invested, (2) buy a yacht made of Cuban mahogany and party with models...why would anyone in their right mind pass that up?

Unfortunately, at least for the central planners at the Bank of Japan who would love to be as efficient at creating asset bubbles as their U.S. counterparts, Japanese investors have a slightly longer memory than U.S. investors and have shunned stocks ever since an entire generation of wealth was wiped out in the 90's.  After 20 years of stocks pretty much only trading in one direction, one can understand their concern.

Moreover, given the chart above, perhaps it's not surprising that millennials in Japan use the words "Risky", "Gambling", "Scary" and "Loss" most frequently to describe the idea of "investing" (chart per the Wall Street Journal).

Japan

All that said, as the Wall Street Journal points out today, with an aging population and trillions of dollars worth of pension promises about to come due, Japan's central planners have no option to double down on efforts to convince millennial investors to once again throw all of their money into the Nikkei slot machine.

If anything can persuade Japanese to invest, it may be fear rather than greed. The government’s debt, more than twice the nation’s annual output, has fanned doubts about whether promised pensions will be forthcoming decades from now.

 

More than half of Japan’s household wealth sits in bank deposits or cash under the mattress, according to the Bank of Japan, compared with 14% in the U.S.

 

“We have to increase our assets. Otherwise we cannot survive in a super-aged society,” said Satoshi Nojiri, director of the Fidelity Retirement Institute in Japan.

Luckily, there is even a new Robot, Theo, who will take your monthly deposit and gamble invest it for you.  Theo was created by a company called Money Design whose 'business strategy' is centered around targeting "smartphone users accustomed to playing games on their phones"...you know, because if you can play Angry Birds on your iPhone then you can definitely be a rock star investor.

Money Design has a smartphone app, Theo, that aims to appeal to a cautious generation of investors accustomed to deflation. If it can unlock Japanese savers’ appetite for stocks with a click or a swipe, it would succeed at what many in Tokyo have found a nearly impossible task.

 

Nao Kitazawa, a former Morgan Stanley investment banker who helps run the startup, called Money Design, does his best to distance himself from the past, with his New Balance sneakers and black T-shirt. His target is smartphone users accustomed to playing games on their phones.

 

“We’ve tried to make our service cool, sharp, new,” said the 42-year-old entrepreneur. “We’re getting rid of some of the stiff formality of meeting with brokers for an hour during lunch time.”

 

The Theo app pitches a small starting investment of around $100 a month, with a robo adviser selecting model portfolios based on the investor’s inflation expectations and risk appetite. Fees come to 1% of assets annually.

 

“We want to provide an alternative to a bank deposit,” said Money Design’s Mr. Kitazawa.

 

The business is still small: Since starting in February last year, Theo has drawn in 18,386 accounts and $106 million in assets under management as of the end of September 2017, with about half of clients in their 20s or 30s.

Japan

Of course, efforts to get millennials in Japan to invest are nothing new and the latest such efforts even include tax exempt brokerage accounts for people willing to gamble just $3,500 per year...

Efforts to attract new blood have fallen short before. The government a few years back created a tax exemption for small brokerage accounts in hopes of getting people to dip their toes in the market. Not many did, and government figures show half the accounts are inactive.

 

This month, the government started taking applications for a new program that will start next year and be available at major brokerages. Officials said they have streamlined the process and lowered the minimum investment a year to ¥400,000 (about $3,500) from ¥1.2 million, while allowing tax benefits to last longer.

 

To Japanese policy makers, stock investing isn’t just a personal choice. Bringing a new crop of risk-taking investors into the market, they say, could in turn encourage more risk-taking entrepreneurs to create the kind of companies that are driving the U.S. economy.

 

Getting money to flow into stocks could “contribute to economic growth eventually,” a Financial Services Agency spokesman said. “Then we hope that through long-term, regular diversified investments, people can share the success of the securities market.”

...The desparation almost feels like a comp from a casino way off the strip in Vegas..."free" meat loaf dinner for anyone willing to gamble away their mortgage payment this month!

Of course, up until this morning it looked as if Japanese investors were once again getting excited about investing...and then this happened:

So what say you?  Is this just a temporary blip or is a fragile Japanese investor base once again preparing to "sell the rip."

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JibjeResearch's picture

ahahh ahahahah... that's funny...

US Gov: please buy stock gen Y and Z

Giant Meteor's picture

You laugh now but ..

"...The desparation almost feels like a comp from a casino way off the strip in Vegas..."free" meat loaf dinner for anyone willing to gamble away their mortgage payment this month!"

 

auricle's picture

Why should they, they have a bank that will do it for them. 

ParticularlyStupidHumanoid's picture

Millennials see stocks as too risky. Isn't that cute? They have no idea how risky USD is these days...

Raffie's picture

Selling millstones neckties to the younger crowd, nice...

Deplorable's picture

and lead lined underwear.

Mementoil's picture

You want me to buy stocks?
Do what every retailer does in order to lure customers - cut prices by 90%!

Yen Cross's picture

 Japan is so fucked ! Hey Man, you're gonna give me some paper money to go fight a war for you?

 This is why 18- 49 age group exists?

RumpleShitzkin's picture

My message to Japanese Millennials.
A radioactive gopher is spewing shit and death all over you.
Fuck Stocks. Run for your lives.

ParticularlyStupidHumanoid's picture

I... don't think that's scientifically accurate.

JuliaS's picture

It's not a market bubble. It's a tumor.

Skeptophrenic's picture

Totally awesome.

I guess everyone wishes for a bagholder.

Dragon HAwk's picture

Sucks when nobody wants your bag of Shit.

slipreedip's picture

STOCKZILLA!!!!!

In defence of the Japanese, at least theyve learnt their lesson.....yeah Im looking at you Wall ST.

 

Please invest in the stock market so we can pay pension liabilities to the generation that came before you.

Yes, youd better hope the generation after you will do the same thing...

Oh yeah, there is a good chance they wont be able to get a job due to AI and automation.....

Ummmmmm

 

Yen Cross's picture

 The "blue marble" is an overlapping loop !

  Growth is finite, hence stagflation.

 AMZN isn't new. Perceptions change? Remember the gay assed "Whole Paycheck" stores?

Two-bits's picture

The poles want their kids to fuck, the japs want their kids to buy stocks.

Yep, got it.

Yen Cross's picture

 You're 100% correct.

  Don't mess with Mrs. Watanabe

whatswhat1@yahoo.com's picture

U.S. wants their kids to.............?

You tell me.  I have no idea.

whatswhat1@yahoo.com's picture

Put down that video game controller and get the fuck out (of the basement).

Inzidious's picture

When you get over the issue of caring what people think about you, combined with the knowledge of getting out of America whenever you need female attention, the basement is actually the best place to be. 

ali-ali-al-qomfri's picture

Yes in the Southwest corner, the safest spot.

 

whatswhat1@yahoo.com's picture

I would think one would do just the opposite regarding no longer caring what people think.   I'm with you on female attention. 

Two-bits's picture

Load themselves down with an insurmountable debt, by which the slave masters extract wealth from them in perpetuity. 

pump and dump's picture

I hope theo knows how to short

ParticularlyStupidHumanoid's picture

"Comments are disabled for this video." OH REALLY?!!!

earleflorida's picture

'generation x - y- z capitalism'

were all fucking rich!!!

ain't it great...

and guess what?   it's all the British fault when they imported imperial capitaism into america and layed the groundwork for 1913--- leaving america for europe to start part two of the '3-part big`bang'

Cluster_Frak's picture

Can you use student loan to buy stawks? I need a 0%, 400 Year loan.

SuperRay's picture

How do you say 'musical chairs' in Japanese?

Erwin643's picture

"Ahhhh hootchie kootchie, ya mama."

Erwin643's picture

LOL. Stupid-fuck Japs.

And everyone used to think they were so smart.

headless blogger's picture

It's just more of the Bubble system that is unsustainable. Next they will try bringing in masses of immigrants....part of the West's answer....which will only make it worse.

Let it all pop. Better now than later.

Captain Nemo de Erehwon's picture

Or everyone can pop a few pills and then who cares sooner or later. Swoop down in a virtual reality flight and watch the bubbles float by ...

Wait ...cannot they just start mining bitcoins to pay off their debt? I heard they still have powerful computers.

DEMIZEN's picture

as long as you sell them next day.

slvrizgold's picture

Prease prease pretty prease buy!  What's not to rike?  Stocks have arready raunched. They continue to ruve you rong time.   The sky is the rimit.

Tribe Traders's picture

Japan needs to do more of what US does just prop up the markets.

Did you all see the futures this morning?  DOWN just like SHEPWAVE said they would be yesterday.   I am sorry but they are as crooked as it comes. 

I am making my money and running.  They will turn on us eventually I fear.  My pappy always told me if it seems too good to be true it usually is.

Bopper09's picture

Because once the BOJ owns 100% of the Nikkei, they won't be able to prop it up anymore.

Captain Nemo de Erehwon's picture

Just eat more fast food ...your assets will increase.

venturen's picture

Since when did Debt Snake eating its tail start making sense...government prints money buys stocks/bonds to drive market higher...while piling on the debt they supposedly want to get rid of?

Captain Nemo de Erehwon's picture

Since when did anything make much sense ...

The world is round ... grow too much and you end up at your tail. Wanna grow more, you have to eat it to make space.