Model portfolio

[floyd]

Anybody care to comment on this model portfolio for someone planning to retire in Japan (i.e. returns have to be viewed in Yen terms) in 15-20 years' time?


Japan Stocks 20%
Other Developed Market Stocks 15%
Emerging Markets Stocks 10%
Japan Bonds 10%
International Bonds 5%
Japan Real Estate 5%
International Real Estate 5%
Commodities 10%
Infrastructure 5%
International Inflation Linked Bonds 10%
Cash/MMF 5%

[Gaijin 06]

Looks pretty sensible. Personally I would have slightly more money in equities but you've ticked all the right boxes, have a good degree of diversification in both asset classes and geographical terms.

Often people will shift their allocations as they move towards retirement, out of equities and high yield bonds into loss volatile classes like goverment bonds and cash.

[tokyoleone]

Agree with Gaijin 06 above. Looks well-diversified and covers all the important asset classes.

You say your time horizon is 15-20 years, which makes me assume you are relatively young and could tolerate more risk by having a higher percentage in equities. That's a personal choice though and I myself would leave it just about as is.

[bawjaws]

Originally Posted by floyd

Anybody care to comment on this model portfolio for someone planning to retire in Japan (i.e. returns have to be viewed in Yen terms) in 15-20 years' time?


Japan Stocks 20%
Other Developed Market Stocks 15%
Emerging Markets Stocks 10%
Japan Bonds 10%
International Bonds 5%
Japan Real Estate 5%
International Real Estate 5%
Commodities 10%
Infrastructure 5%
International Inflation Linked Bonds 10%
Cash/MMF 5%

Japan Bonds??? Wouldnt be taking them. If it purely for currency, even still I wouldnt take them.

You need hedge funds in their. Markets havent probaly bottomed out yet and I would wait until you significantly switch into equity. I would include energy funds too.

Managed future funds are a good diversifier. If your up for a bit of risk - look up the IQS fund. Not for the faint hearted.

Get a protfilio where you can hedge your currency, theres more gains to be made outside of Japan. Japan will remain behind other markets for years to come.

[Gaijin 06]

Originally Posted by bawjaws

You need hedge funds in their. Markets havent probaly bottomed out yet and I would wait until you significantly switch into equity. I would include energy funds too.

Some points - these are my personal opinions:

1. Hedge funds - too broad an asset class to recommend unconditionally. Are you recommending abolute return funds, or leveraged up high risk plays? Or special situations funds? They are have completely investment strategies and different risk profiles. Don't think it is appropriate to simply recommend hedge funds.

Personally, I believe that most hedge fund fee structure rewards inappropriate risk taking due to the lopsided performance fee where you give (maybe 20%) of your positive alpha to the hedge fund manager but get nothing in return if he underperforms. This leads to encouraging excessive risk taking in my view.

2. Calling markets is impossible. On a 20 year view it is safe to say equities should rise. They have in every other 20 year period I believe. I think people over estimate their ability to time markets and lose too much money in commissions and switching fees doing so.

3. He has commodity funds, so that ticks the energy box.

Originally Posted by bawjaws

Get a protfilio where you can hedge your currency, theres more gains to be made outside of Japan. Japan will remain behind other markets for years to come.

Possibly, possibly not. I believe Japan could re-rate significantly with a change of government policy and an increased focus on using capital properly. This won't happen overnight but it could happen in the next few years. There are precious few signs of it, but I wouldn't discount the probabilty completely.

Given he wants he retire in Japan, I think 20% into domestic equities is appropriate as most non-Japanese asset allocators would have a 10-15% position in Japan as its natural share of the world economy.

[bawjaws]

Originally Posted by Gaijin 06

Some points - these are my personal opinions:

1. Hedge funds - too broad an asset class to recommend unconditionally. Are you recommending abolute return funds, or leveraged up high risk plays? Or special situations funds? They are have completely investment strategies and different risk profiles. Don't think it is appropriate to simply recommend hedge funds.

Personally, I believe that most hedge fund fee structure rewards inappropriate risk taking due to the lopsided performance fee where you give (maybe 20%) of your positive alpha to the hedge fund manager but get nothing in return if he underperforms. This leads to encouraging excessive risk taking in my view.

2. Calling markets is impossible. On a 20 year view it is safe to say equities should rise. They have in every other 20 year period I believe. I think people over estimate their ability to time markets and lose too much money in commissions and switching fees doing so.

3. He has commodity funds, so that ticks the energy box.



Possibly, possibly not. I believe Japan could re-rate significantly with a change of government policy and an increased focus on using capital properly. This won't happen overnight but it could happen in the next few years. There are precious few signs of it, but I wouldn't discount the probabilty completely.

Given he wants he retire in Japan, I think 20% into domestic equities is appropriate as most non-Japanese asset allocators would have a 10-15% position in Japan as its natural share of the world economy.

I was thinking absolute return funds (fund of funds), multi strategy, aiming for about 10% pa. Alot of hedge fund fees are coming down due to the sheer volume of them and competition. I personally like Thames River Warrior - good safe bet with steady returns. Well outpeformed the markets.

I agree - calling markets is too hard. However given all the contining bad economic news recently most analysts agree that its going to be a rocky ride over the next 18 months. But yes - I would buy equity now, I like China at current prices. But most markets seem good value but I not going all in quite just yet.

Commodities - I have several funds which only focus on metals, mining , agriculturals etc.......but yes a general fund would have energy. I was just getting more specific.

My switching fees are like 2000 yen so am not so bothered. but I m still going to wait until the massive switch into equity.

I just dont see Japan getting things going anytime soon. Government are too caught up in redtape. Too many false starts as it where.

I think most global funds wouldnt have that high a percentage in Japan (10 - 15%) - not exactly a fund managers favourite I understand.

[Gaijin 06]

Originally Posted by bawjaws

I was thinking absolute return funds (fund of funds), multi strategy, aiming for about 10% pa. Alot of hedge fund fees are coming down due to the sheer volume of them and competition.

I think as the market develops, both returns and fees will come down and hedge funds will become as commoditized as long equity funds. Personally I prefer index trackers to both :-)

Originally Posted by bawjaws

I personally like Thames River Warrior - good safe bet with steady returns. Well outpeformed the markets.

I'm not familiar with it, all I would say is past performance is not a reliable guide to future returns. However of course there are better and worse hedge funds so no doubt this could be one of the better ones.

Also I won't invest in a product that I do not understand how my money will be invested, and checking their website doesn't give me enough information to be interested.

http://www.thamesriver.co.uk/funds/warrior.htm

Originally Posted by bawjaws

I just dont see Japan getting things going anytime soon. Government are too caught up in redtape. Too many false starts as it where.

I fear you are right but hope you are wrong. Lets have another reformer in power please! The LDP election and next years elections give two chances. My favourite comment on the LDP leadership election is "Aso comes with a free 1 year put option".

Originally Posted by bawjaws

I think most global funds wouldnt have that high a percentage in Japan (10 - 15%) - not exactly a fund managers favourite I understand.

There is a Merrill Lynch Global Fund Manager Survey that comes out monthly - I don't recall the precise figure but basically the average fund manager is now neutral Japan, having been underweight for the past 2 or 3 years.

I can't find the presentation on my home computer, but the latest press release is here

http://www.ml.com/index.asp?id=7695_...78_92707_94125

Interestingly many managers are very overweight cash and that has been one of the leading contrarian indiactors in the past.

[bawjaws]

Originally Posted by Gaijin 06

I think as the market develops, both returns and fees will come down and hedge funds will become as commoditized as long equity funds. Personally I prefer index trackers to both :-)



I'm not familiar with it, all I would say is past performance is not a reliable guide to future returns. However of course there are better and worse hedge funds so no doubt this could be one of the better ones.

Also I won't invest in a product that I do not understand how my money will be invested, and checking their website doesn't give me enough information to be interested.

http://www.thamesriver.co.uk/funds/warrior.htm




I fear you are right but hope you are wrong. Lets have another reformer in power please! The LDP election and next years elections give two chances. My favourite comment on the LDP leadership election is "Aso comes with a free 1 year put option".



There is a Merrill Lynch Global Fund Manager Survey that comes out monthly - I don't recall the precise figure but basically the average fund manager is now neutral Japan, having been underweight for the past 2 or 3 years.

I can't find the presentation on my home computer, but the latest press release is here

http://www.ml.com/index.asp?id=7695_...78_92707_94125

Interestingly many managers are very overweight cash and that has been one of the leading contrarian indiactors in the past.

I like trackers too - buy about 70% for my equity purchases. There are some very good active mangers that I invest into for long only, but only for certain markets. I like Investec Global Strategic Value Fund for example, First State Asia Pacific, Barings Eastern Europe, but I agree Trackers for the majority are the way to go. ishares is excellent. Past perfromance is never a guide, but hey there are some excellent fund management teams out their and how do you judge them - past performance and volatility compared to the index are important factors to me

You wanted to be in hedge funds about 20 years ago for the real returns, but you are right, returns will come down but It does provide a good alternative in asset clas. Thames River is a good fund, risk spread well. I thought their site was quite informative - I assume you know about all the hedging strategies so the fasctsheets tell you what type of funds it purchases. Anyway - agreed, there are alot of good steady funds, I would only invest in hedge funds that have over a $1 billion usually, especially in this credit market.

I think futures funds, albeit very risky are good to have a small percentage in a long term hold.

I hope Japan picks up - Im not holding my breath though !

The cash holdings part is intersting. The credit crisis will run well into 2010 I believe so I cant see a quick pick up in markets to be honest. Cash could be a good idea!

[floyd]

Thanks guys! Lots of useful tips to think about!!

My portfolio at the moment is:

Japanese stocks 18%
Mixed global equities/bond fund 16%
Japanese REIT 7%
Global REIT 8%
Yen cash 25%
High interest Euro bank account 13%
US$ MMF 13%

Definately want to put all that cash to use, particularly the Yen, but I agree with you guys that equities probably have further room to fall (commodities too), so may hang on a little while longer before going shopping...

By the way, any tips on currency hedging, other than simply buying Japanese equities/bonds?

[floyd]

By the way, there's a lot of talk these days about ETFs, although I personally like the idea of trackers too. Which would you recommend, ETFs or trackers? I was thinking maybe buying trackers for the equities and ETFs for bonds, commodities and infrastructure play.

My mixed fund has consistently outperformed its benchmark by quite a big margin, so I don't mind paying the fees. On the other hand, many funds seem to actually perform worse than trackers - when I bought my Japanese equity fund (Morgan Stanley), I was offered 7 actively-managed funds. Of those, only the Morgan Stanley one had significantly outperformed the Nikkei over a 3 and 5 year period (although, its underperformed since I bought it, of course!!lol!!). Two had moreorless matched the Nikkei, and four had underperformed, 3 by quite a margin.

[bawjaws]

Originally Posted by floyd

Thanks guys! Lots of useful tips to think about!!

My portfolio at the moment is:

Japanese stocks 18%
Mixed global equities/bond fund 16%
Japanese REIT 7%
Global REIT 8%
Yen cash 25%
High interest Euro bank account 13%
US$ MMF 13%

Definately want to put all that cash to use, particularly the Yen, but I agree with you guys that equities probably have further room to fall (commodities too), so may hang on a little while longer before going shopping...

By the way, any tips on currency hedging, other than simply buying Japanese equities/bonds?

You can get Yen classed hedge funds that invest globally which will protect your currency.

You seem to have a spread of currency already, so if you decide to come out of cash you will have plenty of investment options as Yen aint the best currency to be buying in.

Hows your REITs doing if you dont mind my asking??

I only have one property fund - it invests in student accomodation, seems to have avoided the credit crisis completly. I have properties in the UK which have not though and now started falling in value.....hope it doesnt last long!

[Gaijin 06]

Originally Posted by floyd

On the other hand, many funds seem to actually perform worse than trackers - when I bought my Japanese equity fund (Morgan Stanley), I was offered 7 actively-managed funds.

Most research indicates around 80% of actively managed funds underperform their benchmarks.

[bawjaws]

Originally Posted by floyd

By the way, there's a lot of talk these days about ETFs, although I personally like the idea of trackers too. Which would you recommend, ETFs or trackers? I was thinking maybe buying trackers for the equities and ETFs for bonds, commodities and infrastructure play.

My mixed fund has consistently outperformed its benchmark by quite a big margin, so I don't mind paying the fees. On the other hand, many funds seem to actually perform worse than trackers - when I bought my Japanese equity fund (Morgan Stanley), I was offered 7 actively-managed funds. Of those, only the Morgan Stanley one had significantly outperformed the Nikkei over a 3 and 5 year period (although, its underperformed since I bought it, of course!!lol!!). Two had moreorless matched the Nikkei, and four had underperformed, 3 by quite a margin.

Read this:

http://www.moneyweek.com/investments...s-instead.aspx

Some trackers ares shocking - depends on managers fees and abiltiy to track it well!

With funds - I always check the volatility rating, and yeah sounds like you got unlucky with your MS japan fund!

Only 40% of fund managers outperform the market - so for majority of equity purchases - I use ETF/Tracker type funds. But some managers are very good. have one fnd thats outperformed its index over 5 years by 50%, so some risks are worth it.

[floyd]

Don't ask me about my REITs!! Bought them last year just at their peak! The global one is down 44% and the Japan one is down 39% (although that excludes dividend pay-outs).

My Japan equities not great either! I bought the first batch when the Nikkei was at 17,000, although I mitigated by buying more when the Nikkei was at 15,000 and 13,000. Will probably buy more if/when the Nikkei gets close to 11,000.

[bawjaws]

Originally Posted by floyd

Don't ask me about my REITs!! Bought them last year just at their peak! The global one is down 44% and the Japan one is down 39% (although that excludes dividend pay-outs).

My Japan equities not great either! I bought the first batch when the Nikkei was at 17,000, although I mitigated by buying more when the Nikkei was at 15,000 and 13,000. Will probably buy more if/when the Nikkei gets close to 11,000.

I know you should never buy high sell low, but I would consider selling the REITs and getting to something with more recovery potential. Property prices will be affected for years to come.

I lost a fiar chunk on equities too - the ups and downs!

[floyd]

I am leaning the same way as you, mate...or at least buy a REIT fund where the dividends are re-invested rather than paid out to take advantage of cheap prices without having to plow fresh money into REITs.

By the way, how would you play the pound at the moment? I earn in pounds and with it falling through the floor not sure whether to a) just invest them in UK assets (which I could possibly sell once the pound picks up again) and live off my Yen I have saved up; or b) use my Yen to buy foreign asssets now that the Yen seems to be strengthening against most currencies?

I suspect currencies like the Euro and the pound still have further to drop against the Yen, not because the Yen is undervalued, but because other currencies are overvalued.

[floyd]

I'm actually pretty optimistic as a 'Japanese' investor...I don't think the time is yet here to buy, but if global equities drop, say, another 10%+, they will start looking pretty cheap just at a time when the Yen is gaining strength (making them 'doubly' cheap)- and my feeling is that in the long term the potential for currency appreciation is very much in favour of non-Japanese currencies (making them 'doubly' more valuable).

The big question, though, is what the collateral impact of a re-valued Chinese Yuan (which is inevitable at some stage) will be on the Yen.

[tokyoleone]

Originally Posted by floyd

By the way, there's a lot of talk these days about ETFs, although I personally like the idea of trackers too. Which would you recommend, ETFs or trackers? I was thinking maybe buying trackers for the equities and ETFs for bonds, commodities and infrastructure play.

ETFs ARE trackers, if by trackers you mean index funds. All ETFs follow some kind of index. Thus you can get ETFs that track the S & P 500, international indices, small cap stocks, the TOPIX, etc. Others follow bond or REIT indices.

There really aren't any actively managed ETFs at this time, though some fund companies (like Pimco in the US) are trying to develop them.

Personally, I own 2 ETFs. One tracks international small cap stocks and the other is in international inflation-indexed bonds

[Plats]

Originally Posted by bawjaws

You can get Yen classed hedge funds that invest globally which will protect your currency.

I don't see how a yen-denominated global fund would protect his yen.

[bawjaws]

Originally Posted by Plats

I don't see how a yen-denominated global fund would protect his yen.

Its called currency hedging. Pretty simple really. Hedging - protects your invested currency - for a charge of course.

Try googling investment 101

[Gaijin 06]

Originally Posted by bawjaws

Its called currency hedging. Pretty simple really. Hedging - protects your invested currency - for a charge of course.

Most yen dominated global equity funds won't hedge out currency risk though. Can you find one that does?

[bawjaws]

Originally Posted by Gaijin 06

Most yen dominated global equity funds won't hedge out currency risk though. Can you find one that does?

I never said Global equity funds. I said Global Hedge funds - which of course can invest where they like and usually spread their geographical assets to reduce risk.

If you have enough money any investment bank willl put a FX hedge in place for your portfolio.

[floyd]

Bawjaws,

Wouldn't it be cheaper to simply buy a fund from a Japanese financial institution than to buy a global hedge fund? I know Japanese banks tend to have pretty high fees but I am under the impression that hedge funds' fees are even higher and I assume Japanese fund managers such as Nomura automatically hedge funds aimed for sale in the domestic market...

[donpaulo]

just to point out the obvious, which doesn't seem to have been discussed yet.

Hedge fund in and of themselves are a valid option in any portfolio but take the time to do your due diligence on the management team in place before buying.

[Plats]

Originally Posted by bawjaws

I never said Global equity funds. I said Global Hedge funds - which of course can invest where they like and usually spread their geographical assets to reduce risk.

If you have enough money any investment bank willl put a FX hedge in place for your portfolio.

I tried googling investment 101 as you kindly suggested but I still can't see how investing in a global hedge fund protects your base currency.

And if it did, why would you need to use FX?

[bawjaws]

Originally Posted by Plats

I tried googling investment 101 as you kindly suggested but I still can't see how investing in a global hedge fund protects your base currency.

And if it did, why would you need to use FX?

Im not trying to be rude for once, but are you aware of what a hedge fund does and what strategies it can employ?

Currecy Risk can be protected by buying contracts (standardised or OTC) hence simply put, for a cost, if you invest in Yen, then your investment gains will not be subject to FX movements (Only by the cost of the currency contratct.) Thats why alot of hedge funds have several diffent currency classes - and there all protected. Try googling currency hedging.

[bawjaws]

Originally Posted by floyd

Bawjaws,

Wouldn't it be cheaper to simply buy a fund from a Japanese financial institution than to buy a global hedge fund? I know Japanese banks tend to have pretty high fees but I am under the impression that hedge funds' fees are even higher and I assume Japanese fund managers such as Nomura automatically hedge funds aimed for sale in the domestic market...

Not sure to be honest about Japanese financial Instituiions. I never buy their funds direct. Hedge funds have higher fees for a reason, and its a realtively new concept in Japan to be honest. I would reccomend if you want reasonabae retuns with low risk, invest in hedge funds with large amounts of assets. Samller funds can be risky in this credit crisis.

When it to comes to fee's most people are anal about it, you get what you pay for. My trackers at about 0.5% per annum charge have crashed, my hedge funds ata bout 1.5% plus 10% incentive have made over 9% in the bad markets. I wish I sold the chaep trackers and invested in the 'expensive' fund!

Of course its all about a balanced portfolio, and I still like trackers for alotof my equity purchases, but research is the most important part of investing. If you want some ideas on funds for certain areas, PM me and I can tell you more about where I invest and what research I used for active and ETF funds.

There is so many hedge funds now and its a good asset diversification and it protects your currency which is important.

[Plats]

Originally Posted by bawjaws

Im not trying to be rude for once, but are you aware of what a hedge fund does and what strategies it can employ?

Currecy Risk can be protected by buying contracts (standardised or OTC) hence simply put, for a cost, if you invest in Yen, then your investment gains will not be subject to FX movements (Only by the cost of the currency contratct.) Thats why alot of hedge funds have several diffent currency classes - and there all protected. Try googling currency hedging.

OK. I give up. Please tell us the name(s) of a global hedge fund which protects the yen.

[bawjaws]

Originally Posted by Plats

OK. I give up. Please tell us the name(s) of a global hedge fund which protects the yen.

WTF do you know about investing? Do you not understand a f'ing Currency Hedge??????????????????

I will five you an example of a hedge fund - Crosby Forsyth Alternative Income Fund - FULLY F**CKING HEDGED FOR CURRENCY in lotsof currencys, Yen, GBP SEK etc etc.........Why cant you understand?

Why dont you look up investment basics???? Its not diffucult! IB's hedge my currency investments here!

[Plats]

Originally Posted by bawjaws

WTF do you know about investing? Do you not understand a f'ing Currency Hedge??????????????????

I will five you an example of a hedge fund - Crosby Forsyth Alternative Income Fund - FULLY F**CKING HEDGED FOR CURRENCY in lotsof currencys, Yen, GBP SEK etc etc.........Why cant you understand?

Why dont you look up investment basics???? Its not diffucult! IB's hedge my currency investments here!

Try not to get upset.

When you said "You can get Yen classed hedge funds that invest globally which will protect your currency" I assumed (wrongly) that you meant an equity fund. My bad.

[tokyoleone]

Originally Posted by bawjaws

I will five you an example of a hedge fund - Crosby Forsyth Alternative Income Fund - FULLY F**CKING HEDGED FOR CURRENCY in lotsof currencys, Yen, GBP SEK etc etc.........Why cant you understand?

Bawjaws is indeed correct. Crosby Forsyth is a fund of funds that invests in sovereign debt, high yield bonds, and many other things and is available in a wide range of currencies, including Yen.

Certainly hope you're not invested in it though. It has suffered massive losses this year, with NAV dropping from a 52-week high of 30.50p to the current 3.88p (up almost 7% yesterday after the Treasury takeover of Freddie Mac and Fannie Mae inspired a rally).

They have also halted investor redemptions to stop asset outflows:

http://uk.reuters.com/article/breaki...33235920080723.

Like funds everywhere these days, a victim of the ongoing credit crisis.

[bawjaws]

Originally Posted by tokyoleone

Bawjaws is indeed correct. Crosby Forsyth is a fund of funds that invests in sovereign debt, high yield bonds, and many other things and is available in a wide range of currencies, including Yen.

Certainly hope you're not invested in it though. It has suffered massive losses this year, with NAV dropping from a 52-week high of 30.50p to the current 3.88p (up almost 7% yesterday after the Treasury takeover of Freddie Mac and Fannie Mae inspired a rally).

They have also halted investor redemptions to stop asset outflows:

http://uk.reuters.com/article/breaki...33235920080723.

Like funds everywhere these days, a victim of the ongoing credit crisis.

Thankfully I got out over a year and a half ago. But my point is you can get nay funds that will fully hedge currency or a IB can do it for you for a cost.

Credit crisis had collpased lots of hedge funds. Stick with the big players, but even those returns are poor this year.

What asset classs is good to go into right now? Special Sits fund? Just cash.

What about Fixed Income - any views on that?

[tokyoleone]

Originally Posted by bawjaws

What asset classs is good to go into right now? Special Sits fund? Just cash.

What about Fixed Income - any views on that?

My US REITS and fixed income are the only things with positive returns this year and have helped mitigate losses in equities. I have a more or less set allocation in US government and corporate bonds and don't change it. It looks something like this:

30% short term bonds
30% intermediate term bonds
30% TIPS (inflation-protected bonds)
10% non-US inflation-protected bonds

What else can one do? Put your cash under the futon!

[bawjaws]

Originally Posted by tokyoleone

My US REITS and fixed income are the only things with positive returns this year and have helped mitigate losses in equities. I have a more or less set allocation in US government and corporate bonds and don't change it. It looks something like this:

30% short term bonds
30% intermediate term bonds
30% TIPS (inflation-protected bonds)
10% non-US inflation-protected bonds

What else can one do? Put your cash under the futon!

I bought Short Term Bonds and inflation protected bonds too. Got some fix term cash deposits at decent rates. I also have a student accomodation property funds thats doing well. Its such a tricky market now - Im convinced its gong to go down further.

I am tempted by a Equity Financials fund though, and China, but got a feeling could get burned. Timing the market is a b*tch

[Gaijin 06]

Originally Posted by bawjaws

I am tempted by a Equity Financials fund though, and China, but got a feeling could get burned. Timing the market is a b*tch

Timing the market is impossible. I wouldn't mind investing in European and US banks currently but I would steer clear of anything with exposure to Japanese banks.

[Gaijin 06]

Originally Posted by bawjaws

What asset classs is good to go into right now? Special Sits fund? Just cash.

If I had a free hand, I would be piling into distressed Japanese real estate companies at the moment. The sector has been destroyed, first by incompetence government law making and second by incompetent Japanese bank lending.

Several viable companies have gone bankrupt and more will follow - there are plenty trading at 95% discounts to a year ago and steep discounts to both book and NAV.

Not all will survive - there are certainly more bankruptices on the way but I believe both foreign banks and more enlightened Japanese institutions will step in at these levels. A lot of these names are profitable but not solvent, and I think that a lot of these names couple easily re-rate 500% in a short time period (or re-rate to 0 yen!)

Lets see how this (theoretical) portfolio of 10% invested in each of these ten companies does at the end of each month for a while. Todays closing price is supplied:


8834 TOWA REAL ESTATE DEVELOPMENT .. 78
8904 SANYO HOUSING NAGOYA CO LTD . 85700
8878 JAPAN GENERAL ESTATE CO LTD . 302
8874 JOINT CORP .................. 241
8869 MEIWA ESTATE CO LTD ......... 503
8924 RISA PARTNERS INC ........... 100900
8838 YURAKU REAL ESTATE CO LTD ... 241
8897 TAKARA LEBEN CO LTD ......... 304
8993 ATRIUM CO LTD ............... 518
8918 LAND CO LTD ................. 16260

[tokyoleone]

Since part of this thread is about hedge funds, I thought this story from the Wall Stree Journal might be of interest:


"In another sign of the changing power dynamics between hedge funds and their investors, funds are offering to cut fees if investors agree to stay put.

Camulos Capital LP in a letter last week asked its investors to promise to keep nearly $2 billion in place with the firm for another year as part of a restructuring. Camulos, the letter said, will take a 1.25% management fee, instead of the standard 2% fee, on most assets. If the fund makes money starting Oct. 1 through 2010, the firm will keep 10% of most profits, not the 20% that is typical of hedge funds and that Camulos investors previously agreed to pay, the letter said.In another sign of the changing power dynamics between hedge funds and their investors, funds are offering to cut fees if investors agree to stay put."

Here's a link to the complete article:
http://online.wsj.com/article/SB1220...=2_1569_topbox

So many investors are trying to flee underperforming hedge funds that fund managers are thinking up new ways to get them to stay. Cutting fees - now that's a novel idea for Wall Street.

[Plats]

I've been under the impression that hedge funds are for individuals with large sums to invest, maybe $1 mil. USD in liquid assests that they are willing to lose. This would require a net worth in the $5 to $10 mil. range. Although I've read they are making products for small investors, not being a multimillionaire, I don't think they are for me.

[bawjaws]

Originally Posted by Plats

I've been under the impression that hedge funds are for individuals with large sums to invest, maybe $1 mil. USD in liquid assests that they are willing to lose. This would require a net worth in the $5 to $10 mil. range. Although I've read they are making products for small investors, not being a multimillionaire, I don't think they are for me.

That would of been the case 15 years ago - not today.

You can invest into a hedge dund with as little as 10,000 USD, These funds are large multi strategy funds, which means reduced risk for you and the aim for about 7 - 15 % per annum return depending on its overall allocation or course and the managers objective. You do not need to be a multi millionaire, and the are a good diversidication in a portfolio. You should conside them.

Some very speciallsed funds of course require huge amounts, but the pure amount of hedge funds on the market means they developed sub funds for small investors as competition is high.

[bawjaws]

Originally Posted by Gaijin 06

Timing the market is impossible. I wouldn't mind investing in European and US banks currently but I would steer clear of anything with exposure to Japanese banks.

Stay away from lehman bros.

http://news.bbc.co.uk/2/hi/business/7606946.stm