Japanese small caps
Flight or fight? Investors are going for the latter. Dare I believe that it, but after months of runaway markets and profits, some complacency had placed in. Nevertheless the tide is popping against them. Consider%u2026 The headwind has rocked investors back on the heels a bit and they alsoPer centu2019re turning to the flight instinct %u2013 into cash and (gasp) U.S. Treasuries, coming from all assets. I don%u2019t recommend you join them. Instead, boost to purchase Japanese small-cap stocks. Here%u2019s why%u2026 Value investing: Never en-vogue, but great during turbulence In Tuesday%u2019s column, my colleague, Alexander Green, discussed the worthiness investing concept. Within it, he noted the job of Ben Graham and David Dodd, who believe that their way of value investing not just brings about higher returns, but additionally provides a %u201Cmargin of safety.%u201D However, insisting with a %u201Cmargin of safety%u201D doesn%u2019t simply mean fleeing into cash. That strategy doesn%u2019t pay %u2013 especially now. The typical piggy bank yields a paltry .87%, in accordance with Bankrate.com. Not to mention, bailing into cash requires knowing precisely when to get back into the market, which can be impossible. We don%u2019t attempt to time the marketplace %u2013 and neither when you. Instead, remember this: Deep value investments always performs best in the end, based on three significant valuations%u2026 In case you%u2019re a pessimist, or non-believer, you can check out each of the hard data behind these figures on the Brandes Institute.) Now let me tell you how Japanese small-cap stocks squeeze into the equation%u2026 Why Japanese small Fashion Caps are the cheapest Japanese small-New Era hats stocks are the cheapest on earth right this momentPer-centu2026 These deep value investments boast a far more impressive long-term reputation than run-of-the-mill value stocks. They returned typically 35% per year since 1985. Also itPer centu2019s not confusing why. In the end, easily offered to sell a 100-dollar bill for 50 bucks, you%u2019d jump with the opportunity. Cash is cash. It provides a known value. Understanding that%u2019s what%u2019s taking place in Japan at the moment. Countless stocks are trading at a price-to-book value below one. As well as Japanese firms like to stockpile cash, this book value is %u201Chard%u201D %u2013 mostly in cash. But bargains this way don%u2019t last forever. It%u2019s only dependent on time before investors scoop them up%u2026 Japan is a lot like the Rodney Dangerfield in the investment world %u2013 it gets no respect. Naturally, its economy and stock market hasn%u2019t done much to garner a lot of respect over the past twenty years. But right now, it%u2019s clearly the least expensive and safest country to buy. There just isn%u2019t much more room for these stocks to fall. However, there are plenty of reasons to enable them to jump higher%u2026 As one fund manager reveals, %u201CInvestors still don%u2019t like Japan, however, there is gentle interest and sentiment has been evolving.%u201D Here%u2019s a newsflash, though: The investors with that change of heart aren%u2019t lightweights.