Editor’s note: This article was first published in April 2011, a few weeks after the 11 March 2011 Tōhoku earthquake and tsunami. The suggested investments, Japanese sovereign and corporate debt and emerging-market commodity corporate debt funds, reflect market conditions at that moment.
As we discussed in a previous article, on the very morning of the Japan earthquake, fund managers got to work creating investment funds “suited” to the disaster. The quake weighed for several weeks on the share prices of some companies with a presence in Japan, such as Inditex, to name one from the IBEX.
Among today’s profitable investments, we could highlight Japanese sovereign debt and corporate debt (company debt), since both the government and some of the affected companies will have to start rebuilding. It isn’t easy for small and medium-sized investors to buy this kind of product from another country, so the best way to do it is through investment funds that include these securities in their basket.
On the other hand, funds that invest in the corporate debt of commodity companies in emerging countries are still very profitable, although that return clearly comes with greater risk. Even so, some experts say the risk is much lower these days, since these countries are coping much better than some developed ones.
As you know, I’m not a fan of investment funds, for all the reasons we’ve already discussed. Still, for investors who know what they’re doing and can analyze the “basket of securities” a fund manager proposes, they can be a profitable investment.
It’s a matter of checking with fund managers that have put together funds with these products and seeing whether the terms suit you. For my part, I still prefer investing in the stock market.
Further reading
- Why the stock market is the most profitable investment
- The 7 levels of investors
- Types of financial markets
Featured image: Dick Thomas Johnson, CC BY 2.0, via Flickr.
