Investors seeking meaningful gains from stocks in 2016 would do well to maintain their exposure to equities in markets where central banks appear set to continue with quantitative programs says Japan-based investment manager, Osaka Financial.

Despite widespread assertions that China’s economic slowdown will export falling prices around the rest of the world, Osaka Financial says that it is the response to deflationary pressures that will dictate the direction of stock prices in markets like Japan and Europe.

“The US Federal Reserve’s affair with quantitative easing may be over for now but the Bank of Japan and the European Central Bank seem set to continue with their QE programs for the foreseeable future,” said Cameron Deele, Director of Portfolio Management at Osaka FInancial.

Indeed, ECB President, Mario Draghi, pledged that the central bank would extend its €1 trillion asset purchase program through March 2017. Haruhiko Kuroda, Governor of the Bank of Japan is widely expected to ramp up the central bank’s purchases in 2016 as he tries to ensure that Prime Minister Shinzo Abe can deliver on his promise to lift Japan out of a two decade-long deflationary spiral.

“As long as these central banks are printing money, upside potential in equities is more or less a given but timing is still important,” said Deele. “We would advise clients to buy into selloffs on Japanese and certain European bourses with a particular focus on blue chips,” he concluded.

Osaka Financial believes that although the US Federal Reserve appears to be on a path towards monetary tightening, investors should pay close attention to the economic data emerging from the world’s largest economy for signs of impending recession.

About Osaka Financial
Established in 2007, Osaka Financial is a fully-independent investment and asset management practice providing bespoke financial and wealth management solutions to individuals and families who need to build upon and conserve their wealth. We provide a comprehensive range of services including asset management, retirement planning and portfolio design.

Staffed by a number of exceptionally well-qualified finance professionals, Osaka Financial’s business philosophy reflects the core values of its founders: uncompromising independence, clarity, performance, fiduciary responsibility and integrity.