Asset Allocation Summary
- Global excess liquidity is very favour for equity investment. Short term max downside risk: US Dow= 15,250&14,250, Nikkei= 14,500 . (US Dow= 15,250 (08/24/15) almost hit, Nikkei= 14,630 (02/12/16) almost hit)
- RISK ON environment is good to overwight equities & property while there is the correction risk for the time being.
- Those who can take bigger risk, US equities & bonds will be more profitable than Nikkei as FX profit can be added due to continuous JPY weakness for Japanese investors. (FX no hedge can be recommended on US$/JPY). $yen max downside risk: 107.50 .
- However there exists the new low risk on cross/yen, so that there is no hurry on the investment in Euro land and high yield currencies due to the uncertainty. There are many less risky investment.
- Asian equities should be also focused while China has some uncertainty.
- While JPY weakens vs US$, it strengthens vs others. So JPY has not been underestimated at all, meaning there is further room to be depreciated vs USD.
- US rate hike is nothing but the sign and confidence of economic recovery and it is not necessarily negative for the stock market. Why do investors start to talk about the trend change fm bull to bear so soon? It’s too early for us to be afraid of the Gohst or Zonbi.