Investing in Japan or emerging markets, what do you think?

almondsalty

Who else is thinking investing in Japanese funds might be a great idea right now? Things seem to be on the up since the disasters, and retail sales have increased for first time after the unfortunate disasters (source: investoo.co.uk ).

Any one out there already investing in Japan? What do you think of the situation at the moment? Emerging markets seem like a good bet too, although they are more risky but could pay off bigger in the long run?

Would love to know which you think is best, ie Japan or EM?

Jegersmart

Well I think it is important to make a distinction between EM and Japan in terms of risk. Japan is only one country, EM are a multitude of countries with different strengths, weaknesses, resources and macroeconomics. I would say it is inherently less risky to invest in EM, I use a couple of funds to do so and let the Fund Manager in question choose which specifics are "best".

Personally I currently have ca. 1.5% exposure to Japan and I don't see that changing too much. Japan has a few fundamental issues and these are the same as they have had for a number of years. Timing is critical with Japan (and any investment ofc) because they have been in decades long recession/depression and have very low growth overall. Sure, you could have picked up a gain of 40-50% in the last 3 years after the crash, but other geographic areas - in fact almost all other areas have rebounded more strongly so not sure where that leaves Japan...

imho, dyor.

daveb80

Yeah I have been thinking of investing in Japan recently too. Let me know if you know of any brokers who will do it.

I've been looking to trade in the emerging markets for a while now but struggling to find a broker that will trade in those markets (I was particularly looking for Turkey). Only one I've found so far charged £70 per transaction.

westendguy

http://www.hl.co.uk/funds/fund-news-and-investment-ideas/fund-news--and--alerts/glg-japan-corealpha-research-update

This was posted on HL a few days ago and might possibly be of interest, regarding the GLG Japan Core Alpha Fund.

westy22

I have fairly recently put £5,000 into HSBC Japan Index Tracker - I am up about 7% over 2 months. Not sure how long that will last, however, as all my other stuff is a sea of red!!

temagami

daveb80 wrote: »

Yeah I have been thinking of investing in Japan recently too. Let me know if you know of any brokers who will do it.

I've been looking to trade in the emerging markets for a while now but struggling to find a broker that will trade in those markets (I was particularly looking for Turkey). Only one I've found so far charged £70 per transaction.

For Japan, Interactive Brokers and Saxobank are the only two UK-registered online firms that I know that will do it. You'll pay £5-15 per trade minimum through them. Some traditional brokers will do so as well, but £70 would be about right for that too.

Do you mind saying who you found who will trade Turkey? I've been looking for one who will.

For EMs generally, you need to pick specific markets and look for brokers who will handle them rather than looking for a general broker - at least if you want to pay sensible rates. Often helpful to look at brokers overseas - I use a Singapore-based broker for Asian markets.

I keep a list of who I've found so far that trades which markets and their rates on my website, which I can't post here because I haven't been around long enough to have link posting privileges - happy to send it to you by PM if you want.

pinkteapot

Jegersmart wrote: »

Well I think it is important to make a distinction between EM and Japan in terms of risk. Japan is only one country, EM are a multitude of countries with different strengths, weaknesses, resources and macroeconomics. I would say it is inherently less risky to invest in EM, I use a couple of funds to do so and let the Fund Manager in question choose which specifics are "best".

I have to disagree with the view that EM are less risky than Japan.

Japan is not an emerging market - it is a developed market just like the US, UK etc. A market is either developed or emerging and emerging markets are more risky than developed markets. There is a good article on emerging markets here:

http://www.investopedia.com/articles/03/073003.asp#axzz1TOfWXsNs

A balanced portfolio will have some allocation to both Japan and emerging markets.

Jegersmart

pinkteapot wrote: »

I have to disagree with the view that EM are less risky than Japan.

Japan is not an emerging market - it is a developed market just like the US, UK etc. A market is either developed or emerging and emerging markets are more risky than developed markets. There is a good article on emerging markets here:

http://www.investopedia.com/articles/03/073003.asp#axzz1TOfWXsNs

A balanced portfolio will have some allocation to both Japan and emerging markets.

Yes, I don't disagree that Japan is a developed country or that if you compare investing in Japan to investing in Mongolia that there would be the same level of volatility. The "risk" I talk about is the fact that Japan has had and continues to have very low growth levels and of course are just one country. If you have investments across China, Mexico, Brazil, India, Malaysia and Thailand in an EM fund or other vehicle it would be unlikely that an earthquake in Mexico would affect your holding overall as much as an earthquake (or say a Tsunami) in Japan would if you are investing in Japan solely.

I am not talking about having EM's or Japan as a percentage of overall holdings - I am merely saying that investing in one country only can be more risky than investing in a basket of countries for reasons we have seen this year.

almondsalty

Interesting debate. I think Japan is less risk, it is developed and it produces a lot of stuff the world needs like cars and technology components. Emerging markets are destined for growth too and for different reasons, but we never know what may happen there in the long run.

Still not sure where to go tho!

billybluehat_2

haha i wish i had your problem. Not sure if the wife would agree to me investing in Japan, EM, or Turkey rather than our daughter. ;-0

JamesU

temagami wrote: »

I keep a list of who I've found so far that trades which markets and their rates on my website, which I can't post here because I haven't been around long enough to have link posting privileges - happy to send it to you by PM if you want.

Temagami's excellent links to international brokers:
http://crissholtoheaton.com/international-stock-broker-list/

And comparison between international brokers here:
http://crissholtoheaton.com/international-stock-broker-list/uk-stock-broker-comparison-chart/