Monday, October 03, 2005


Land of Rising Rates

Life is a see-saw, when one thing goes up, another goes down. Have you noticed the lastest move? Japan is going up, up and away.

Historically emerging markets have had a relatively negative corelation to the Japanese market. Indeed, small US stocks and emerging nation stocks tend to trade together and big cap US stocks and Japanese stocks tend to trade together. None of these relationships are perfect but they do exist.

Buy the basket! EWJ is a basket of Japanese stocks. It has made a nice move but I expect about 4 good years from this index. Buy big cap growth stocks in America, four more good years. Reduce your exposure to the over-heated markets.
ETF Investor
US Market BLog
Bill Cara