Heidi Richardson

The NASDAQ hit the all-important 5,000 level on March 2, 2015, for the first time after the dot com bubble burst of 2000.

In recent years, Japan’s government spending has soared. The aggressive fiscal stimulus led to a debt level that is now more than two times that of Japan’s GDP.

Most analysts feel the dollar could strengthen further. You may consider currency-hedged ETFs while investing internationally.

While developed market stocks (EFA) are being supported by quantitative easing programs, emerging market stocks could see some organic growth going forward.

Japan’s Prime Minister Abe has brought about changes in the labor market, and female labor force participation is now on the rise.

Japanese companies are more shareholder-friendly, as the government pushes to strengthen corporate governance. Stock buybacks have reached their highest level in six years in an effort to boost return on equity.

Industrials, utilities, and telecommunications have much higher leverage, as these sectors have massive capital needs.

Facebook has proven to be a game-changer by introducing the world to the concept of social networking, something quite unheard of in the Y2K era.

When to invest? We think US tech valuations look reasonable now. You can also look to market pullbacks for other attractive entry points.

Mature tech stocks are likely to be a good value play this year as the US economy strengthens and both consumer and business spending receives a boost.

Burgeoning debt in Japan could lead to an even weaker yen.

The promise of technology stocks has translated into solid deliverables with strong earnings growth.

The NADAQ’s dominant players have changed drastically in 15 years. The top ten stocks today have only three stocks in common with the NASDAQ of 2000.

Mega- and large-cap tech stocks make up ~79% of the iShares U.S. Technology ETF (IYW), giving you great exposure to mature tech stocks.

Earnings momentum – Worries about the impact of a new consumption tax led many Japanese companies to lower their earnings guidance for the year. Since then, a better-than-expected outcome has set the market scrambling to reprice.

If you’re looking for a simple way to invest in Japan, we suggest keeping it simple with a low cost ETF. The iShares MSCI Japan ETF (EWJ) provides diversified access to large- and mid-cap Japanese stocks.

The primary reason for tech strength is the fact that most tech giants have effective currency hedging techniques in place.

Cyclical momentum favors the tech sector. Economic growth favors cyclical stocks like technology. The tech sector invests in a lot of R&D.

Grexit might not precipitate a financial contagion, but the possibility of a political contagion is very likely. Spain and Italy may decide to follow suit.

Although the valuation multiples for the tech sector are higher than its historical averages, the prices are supported by robust earnings growth.

Investors should look to the Eurozone for value. European equities (FEZ) have been benefiting from the recent $1.1-trillion stimulus.

Heidi Richardson takes a closer look at Abenomics in light of the election. Shinzo Abe won Japan’s snap election.

Despite the fact that tech stocks have run up these last six years, they still look cheap compared to some of the defensive sector stocks.

Brazil’s performance in the 2016 Rio Olympics and worldwide speculation about a Fed rate hike might have a role to play in the country’s stock market performance in fiscal 2016.

Now that Brazil’s political scenario has improved and commodity prices have become more stable, the country is expected to attract investors again.

Brazil’s GDP fell for the ninth consecutive quarter in 2Q16.

First the good news: After two years of a deep recession, the economic fundamentals of Brazil are showing signs of bottoming out. Industrial production has started to turn, and so have sentiment indicators, with business confidence indexes leading the way (source: Bloomberg). Particularly encouraging are the improvements in the inflation trend. Prices have been easing […]

Are Indian corporate earnings likely to turn around? Earnings have been flat since late 2014.

Fragile Five is a term coined in August 2013 to represent emerging market economies, including India, that had become too dependent on foreign investments to finance their account deficits.

Japanese (EWJ) (SCJ) equities have become attractive thanks to relatively low valuations after a 20% fall from highs recorded in August last year.

A portfolio with a focus on quality companies is likely to have lower volatility and could offer stable returns compared to a broader index.

Short-term bonds can potentially offer stability to a portfolio given today’s historically low yields and impending rate hikes.

Investors can hedge interest rate risk by holding floating rate bonds. As interest rates rise, consider investing in long-dated Treasuries.

Heidi Richardson recently visited 10 European countries over four weeks, and observed many signs supporting a currency-hedged exposure to European stocks.

The profitability of Japanese stocks has improved since late 2012, from ~4% to above 8%. However, profitability hasn’t hit the highs of the pre-crisis period yet, and it is slightly lower than American stocks.

Currently, Japanese stocks are trading at a discount of 50% over the S&P 500. Historically, the discount has been slightly less, at ~44%.

Japanese stocks are nowhere close to the levels seen in the late 1980s. Japan’s Nikkei 225 Index peaked at ~40,000 in 1989, but since then it has been a painful ride for the Japanese.

The seemingly never-ending Greek debt (GREK) saga continues to play out, complete with twists, turns, and obstacles à la typical potboiler.

Defensive sectors have steady earnings that usually grow slowly. Cyclical sectors have volatile earnings, but they can see high growth in earnings when the economy improves.

An improving economy means that people have more money to spend on discretionary items like high-end electronics, fancy restaurants, and luxury cars.

In 2015, the tables have turned, and India and Indonesia are now lagging behind other emerging markets.

This article discusses three key points to remember when investing in Europe (VGK) (EZU).

European stocks have benefited from the weak euro. Not only do exports look attractive to Americans, large-cap European companies also gain from currency translation.

While the risk-averse investors are resorting to US Treasuries, which provide higher yields, others are looking at stocks that pay high dividends for yield.

Yields have been dropping in this period, leading investors to prefer government bonds over stock, especially the safer ones, including the German Bunds.

The better-diversified NASDAQ is less prone to risk than the NASDAQ of 2000. The NASDAQ is a different index now.

The main assets of the technology sector are human resources. So, capital expenditure for tech companies could involve money spent on innovation and R&D.

With a strong balance sheet, a mature tech company can afford to pay a higher dividend, buy back shares, or invest in capital expenditure.

The debt-to-equity ratios of several top tech companies suggest that the broader markets are much more leveraged than tech stocks.

Mature tech companies have a lot of cash in their coffers. Companies such as Apple reported 4Q14 net income of ~$18 billion—its best ever.

Japan looks cheap compared to other developed markets. Japanese stock valuations can be justified if the “three arrows” are used prudently.

The worst is over for the Japanese economy in the near term, economists say. But Abe still faces a difficult hurdle of wage growth along with inflation.