Mid term update
Here are our primary recommendations -
1
Japan
Japan was our top pick of the markets for 2012 in our January edition in which we set out the case as to just why we believed it would be an outperformer against other global indices. This played out perfectly for the first 3 months with the index rising from 8500 at the start of the year to 10255 at the peak - a return of over 20% against 10% for the S&P 500 and 8% for the FTSE at their respective peaks as the chart below illustrates. In recent weeks the Nikkei has however returned to flat line on the year, and is now modestly underperforming the World index which is up just 0.5% (time of writing).
Nikkei 225 chart
34 | www.financial-spread-betting.com | July 2012
We stick with our belief that, notwithstanding the slowdown in China - to which Japan is probably the most heavily exposed to given its regional dependence - that valuations here are basically at a bear market trough. A long bet at this level (8450) will likely prove a better home for punters’ money than in the US in particular over the medium term (12 - 18 months). A ‘core’ long bet on the global indices to us.