Saturday, December 17, 2005

Global Investment Strategy - Asia

One of the recent suggestions I have received from several investors is to adopt a global investment strategy. What is it, you may ask. In short, it is a strategy that divides the investment into multiple markets, making use of globalization in order to do so in low rates, giving the investor the opportunity to reduce his risk by depending on multiple markets instead of one. In most global strategies that I have heard so far there is a clear weight to the Asian markets, namely China and Japan, but not only, the Turkish market also show good signs.
The domestic consumer demands in China causes it to overtake the US roll in that section in the short coming months. As for Japan - The last year might be a turning point in Japanese economy which suffers for more than a decade now. The unemployment is at the lowest rate in the last 7 years, real-estate value starts to rise in some places, which is a rare situation in the last 10 year, there are some economical signs that can be observed as an initial process to build an inflation - after a decade of deflation. All the above might be interpreted as a signal to put more attention on the Japanese market.
How to invest in Japan? The most easy way is to use an index that follows this market. EWJ for example is a stock that represents the Japanese Index and follows about 85% of the market share of most of the public companies in this market.
Other options are to trade Japanese companies that already traded in the west stock exchanges, for example Sony, Honda, Canon, Kyocera and more. However, these stocks represents each a portion of the segment that they are belongs to, and this should be taken into account.

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