Sweden counts cost of Japanese disaster

Japan’s crisis raises questions for Swedish investors, says Max Zamanian,
senior lecturer in Financial Economics at the University of Skövde.

“Developments are far from being fully played out, and right now much of the country’s production is standing still. Around the world there has been an immediate negative effect on production processes and on economies. Companies cannot produce when they don’t get deliveries from their subcontractors. That hits both Japan and other countries,” Zamanian said.

The economic effects from the earthquake will hit Sweden’s investors, he suggested, and raises the question of what to do with one’s savings.

“If you have money in the stock market it may be an idea to be cautious, because it is an uncertain situation. Today one doesn’t know if it will become worse. There is always a risk, so it may be good to reduce that risk and take out some of that invested. One strategy may be to leave half [invested] and wait to see what happens,” Zamanian said.

However, there may be also be opportunities for those who wish to take on more risk.

“Those who missed the earlier stock market gains and have cash in savings accounts can slowly start to put it into the stock market. It is simply a long term buying opportunity. What is happening in Japan today is a giant human tragedy. On recognising that, one can also say that in the short term this will benefit Swedish households through lower fuel prices and a slower rate of interest rate rises,” Zamanian added.

 

 

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Jonathan Boyd
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