Metlife Inc (MET), Torchmark Corporation (TMK): Why It Would Be Foolish to Sell Your Stocks

What about international opportunities? Japan just went through a severe decline in this demographic ratio, which served as a headwind to a 25-year bear market. This ratio is set to rise through 2020, though, and it may be the cause for a new secular bull market in equities. iShares MSCI Japan Index is one of the more popular options available. The fund has deep liquidity and offers diversified exposure to more than 300 Japanese companies.

Japan has been front and center with its current monetary and fiscal stimulus. The country has witnessed an 80% surge in the stock market, only to see it immediately crash 20%. Investors should expect significant volatility in the near term if investing in Japan.

Those concerned with currency movements may find the Wisdom Tree Japan Hedged Equity Fund a better alternative, as it attempts to offer equity exposure while simultaneously hedging currency risk. Three big markets where the demographics are set to become a headwind include China, the United Kingdom, and Germany.

The Foolish Bottom Line

The stock market doesn’t move in straight lines, and sentiment will ebb and flow. Next to the valuation of the stock market, (which is reasonable in the context of low inflation) the performance of alternative asset classes and demographic forces might be two of the most important factors for long-term performance. The U.S. stock market is positioned to do very well if bond returns turn negative and demographic forces take root.

Justin Carley has no position in any stocks mentioned. The Motley Fool recommends Home Depot.

The article Why It Would Be Foolish to Sell Your Stocks originally appeared on Fool.com and is written by Justin Carley.

Justin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.