Category

Abenomics

Global Economy

How to Profit From Japan's New Lost Decade

An old Japanese proverb notes "ura niwa ura ga aru" which means the reverse side has a reverse side.

Japanese markets have come a long way in the past 8 months rising an additional 4.94% in wild trading on Monday alone. Yet there are real long-term dangers to all this volatility.

First and foremost, when (not if) Japan collapses it will affect every investor, in every major market, regardless of your exposure to Japan.

Global Economy

Three "Abenomics-Proof" Investments

The Japanese Topix Index is up more than 40% this year (and nearly 71% since July 2012) thanks in large part to Prime Minister Shinzo Abe's unlimited stimulus initiative known euphemistically as "Abenomics."

The argument behind this spending is a classic one, at least in economic terms: stimulate the economy to produce higher inflation, weaken the currency and aid the exporters.

But like Fed Chairman Ben Bernake's spending here and Draghi's spending in Europe, it's ultimately going to fail.

Sure the short-term effects are great…a wildly enthusiastic stock market that's trading at the highest levels seen in 4.5 years, a relaxation of risk and fresh strength in export focused companies that are showing stronger results on a devalued Yen. No question, I'll take a bull market any day.

It's the hangover I'm worried about – nobody knows how long this run will last.

This is especially problematic because most investors don't have the discipline needed to trade in and, of course, out when the party stops.

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Gold

Don't Shy Away from Investing in Gold

Gold prices were up today (Thursday) as the U.S. dollar retreated against other currencies, leading foreign buyers to favor investing in gold

The most actively traded gold contract, for April delivery, rose $2.70, or 0.1%, to settle at $1,590.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

"The gold market is getting propped up by a break in the dollar index," Ira Epstein, director of the Ira Epstein division at the Linn Group, told The Wall Street Journal. "The problem is, people are not buying into the rally, they're buying it on the dips."

If gold prices cross the psychologically important $1,600-an-ounce level, confidence in investing in gold could strengthen.

Until then, it looks like investors will stay busy trying to profit from the record-high Dow.

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