There are still world-class businesses in Japan, and yet, I've never seen a more-nightmarish situation than the one currently plaguing Japan's economy
Baltimore, MD (Vocus) June 30, 2010
Baltimore, MD Vocus) June 30, 2010 -- Now that Japan’s Nikkei 225 is half the relative price of the S&P 500 – and the cheapest it’s been in three decades, investors are flocking to invest in Japan. But now is not the time to invest in Japan, according to a new article from Money Morning.
In fact, Money Morning’s Chief Investment Strategist Keith Fitz-Gerald is cautioning investors to stay far away from Japanese investments.
“There are still world-class businesses in Japan, and yet, I’ve never seen a more-nightmarish situation than the one currently plaguing Japan’s economy,” says Fitz-Gerald.
And he should know. Keith Fitz-Gerald is a noted author, investors and commentator and a 20-year veteran of the Asian markets. He also spends part of each year living in Japan – where he filed this report.
In his latest article for Money Morning, Fitz-Gerald explains why this isn’t the time to invest in Japan:
· Japan’s market is a demographic disaster characterized by a rapidly aging population and low birthrate. How exactly will lagging domestic consumption ever improve?
· Japan is almost entirely dependent on exports. If they can’t take up the slack caused by weakening domestic consumption, the Nikkei will only fall further.
· Japan’s debt as a percentage of GDP is nearly 200% - the highest on the planet. This makes Greece’s debt ratio of “only” 115% seem almost manageable by comparison!
· Japanese firms have some of the highest manufacturing costs on the planet. How will they ever compete with neighbors like China and Korea?
Find out all the reasons investors should ignore the hype and stay away from the land of the rising sun in: “Experts” Grow Bullish on Japan… Even as We See Reasons For Caution
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