Don't abandon Japan

The scale of Japan's economic collapse is jaw dropping. But, while news may look grim on the surface, it's not all doom and gloom, says Cris Sholto Heaton. Here, he describes why the outlook for investors could be better now than it's been for years.

'The bigger they come, the harder they fall' us not supposed to apply to economies. As a country gets richer, it's supposed to be less prone to boom and bust, to twisting in every passing trade wind. So what do we make of Japan?

After all, this is the world's second-largest economy and one of the richest and most advanced countries in the world. Yet Japanese GDP fell at an annualised rate of 12.1% in the last quarter of 2008. January to March 2009 is likely to be as bad. In comparison, the 6.2% plunge in US GDP at the end of last year looks very mild.

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China (CSI 300)2,596+0.7%
Hong Kong (Hang Seng)14.901+2.4%
India (Sensex)10.804+4.4%
Indonesia (JCI)1,466-2.3%
Japan (Topix)846+1.8%
Malaysia (KLCI)941+3.8%
Philippines (PSEi)2,073+4.5%
Singapore (Straits Times)1,829+0.4%
South Korea (KOSPI)1,336+4.1%
Taiwan (Taiex)5,782+4.6%
Thailand (SET)454+2.5%
Vietnam (VN Index)325+9.3%
MSCI Asia79+1.2%
MSCI Asia ex-Japan315+1.7%
Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.