The Bank of Japan’s extreme central banking won’t end well for the world’s third biggest economy.
Or so says Covestor manager Charles Sizemore, who oversees the Global Macro portfolio and three other strategies.
In a post for TheStreet, Sizemore noted that the BOJ’s surprise extension of its current quantitative easing program will increase the central bank’s sheet by “15% of Japanese GDP per year and will triple its purchases of ETFs and REITs.”
In addition, Japan’s government pension fund will be upping its allocation to equities from 24% to 50%.
In Sizemore’s view, the whole effort may be futile:
“Quantitative easing may stave off deflation for a time. But it won’t reignite growth or encourage new borrowing by Japanese companies. Japan is already sitting on overcapacity and has some of the poorest returns on investment in the developed world. Japan is the oldest country in the world with a quarter of its population already over the age of 65. Japan’s population peaked seven years ago at 128 million and hasn’t stopped shrinking since — Japan has about a million fewer citizens every year. By 2060, the Japanese government estimates that Japan’s population will have shrunk to 87 million people.”
Other Covestor portfolio managers in the news:
- Daniel Beckerman, President of Beckerman Institutional and manager of the Asset Allocation portfolio, spoke with TheStreet TV about why he’s positive about the shares of financial research firm Morningstar (MORN) and big data specialist Synaptics (SYNA).
- Jesse Barkasy, who manages the Trend Following portfolio, was interviewed by MainStreet about the the popularity of index funds remains and how they can enhance portfolio performance.
- Barry Randall, manager of the Covestor Crabtree Technology portfolio, told the E-Commerce Times that Amazon’s (AMZN) recent loss needs to be placed in perspective. The company still has a bright future.
