Is the Swiss stock market inversely correlated with the Swiss Franc like Japan today?
"Roughly about 1 of 2 Swiss francs is won abroad. So, yes it is easier for Swiss companies to export when the Swiss franc is not ""too high"" as it has been those last years. The main export market for Switzerland is the UE. Some companies are doing most or all of their business on the Swiss market. Others are much more exposed to the the health of the global economy. When the Swiss franc appreciates, some companies suffer a lot from that and other less. It depends on their product portfolio, competitors, and other factors. The last decades have shown that how the Swiss Franc valuation is less and less correlated with the performance of the Swiss economy. The Swiss franc is used as a safe haven when the global economy goes bad or is uncertain. In those times, the Swiss franc can be overevaluated, at least as compared to the purchasing power. When the global economy is improving, the over-appreciation of the Swiss franc tends to disapear ; this is happening now (in Mid-2017). As a summary, the Swiss franc itself is not truly correlated with the competitiveness of the Swiss economy, but more about how people in the world are anxious. In this regard, it behaves a little bit like gold."
"I went to Morningstar's ""Performance"" page for FUSEX (Fideltiy's S&P 500 index fund) and used the ""compare"" tool to compare it with FOSFX and FWWFX, as well as FEMKX (Fidelity Emerging Markets fund).  According to the data there, FOSFX outperformed FUSEX in 2012, FEMKX outperformed FUSED in 2010, and FWWFX outperformed FUSEX in both 2010 and 2012.  When looking at 10- and 15-year trailing returns, both FEMKX and FWWFX outperformed FUSEX. What does this mean?  It means it matters what time period you're looking at.  US stocks have been on an almost unbroken increase since early 2009.  It's not surprising that if you look at recent returns, international markets will not stack up well.  If you go back further, though, you can find periods where international funds outperformed the US; and even within recent years, there have been individual years where international funds won. As for correlation, I guess it depends what you mean by ""low"".  According to this calculator, for instance, FOSFX and FUSEX had a correlation of about 0.84 over the last 15 years.  That may seem high, but it's still lower than, say, the 0.91 correlation between FUSEX and FSLCX (Fideltiy Small Cap).  It's difficult to find truly low correlations among equity funds, since the interconnectedness of the global economy means that bull and bear markets tend to spread from one country to another.  To get lower correlations you need to look at different asset classes (e.g., bonds). So the answer is basically that some of the funds you were already looking at may be the ones you were looking for.  The trick is that no category will outperform any other over all periods.  That's exactly what volatility means --- it means the same category that overperforms in some periods will underperform in others.  If international funds always outperformed, no one would ever buy US funds.  Ultimately, if you're trying to decide on investments for yourself, you need to take all this information into account and combine it with your own personal preferences, risk tolerance, etc. Anecdotally, I recently did some simulation-based analyses of Vanguard funds using data from the past 15 years.  Over this period, Vanguard's emerging markets fund (VEIEX) comes out far ahead of US funds, and is also the least-correlated with the S&P 500.  But, again, this analysis is based only on a particular slice of time." The total value of the stock market more or less tracks the total value of the companies listed in the stock market, which is more or less the total value of the US economy (since very few industries are nationalized or dominated by privately held companies). The US economy has consistently grown over time, thanks to the wonders of industrialization, the discovery of new markets, new natural resources, etc.  Thus, the stock market has continued to grow as well. Will it forever?  No.  The United States will not exist for ever.  But there's no obvious reason it won't continue to grow, at least for a while, though of course if I could accurately predict that I would be far richer than I am. Why do other countries not have the same result?  China is its own ball of wax since it's a sort-of-market-sort-of-command economy.  Japan has major issues economically right now and doesn't really have the natural or people resources; it also had a huge market bubble a while back that it's never recovered from. And many European countries are doing fine.  German's DAX30 index was at around 2500 in 2004 and is now at nearly 13000.  That's pretty fast growth. If you go back further (there was a crash ending in around 2004), you can see around the fall of the Berlin wall it was still around 2000; even going that far back, that's about an 8% annual bump.  The FTSE was also around 2000 back then, around 8000 now, which is around 5% annual growth.   Many of these indexes were more seriously hurt than the US markets in the two major crashes of this millenium; while the US markets fell a lot in 2008, they didn't fall nearly as much as many smaller markets in 2002, so had less to recover from.  Both DAX and FTSE suffered similar falls in 2002 to 2008, and so even though during good periods they've grown quite quickly, they haven't overall done as well as they could have given the crashes. For example, if the Dow, S&P 500, NASDAQ are all down does that necessarily mean the Canadian stock will get negatively impacted? Or is it primarily impacted by the Canadian market? The TWMJF stock makes up a very small part of the Canadian market so it affects the overall market, but this doesn't mean that the overall market affects this stock. So then the answer is: no, the TWMJF stock price will not necessarily follow either US or Canadian market indexes.  However, there can be major events which can affect the markets, including the stocks which make up the markets. TWMJF will probably be more sensitive to Canadian events than US events. "Due to the issues in the Eurozone, many foreign investors were buying Swiss Francs as a hedge against a Euro devaluation. They were in effect treating the Franc like gold, silver or some other commodity with perceived intrinsic value. This causes huge problems from the Swiss, as the value of the Franc increased and their exports became more expensive for foreigners to purchase. Things were getting bad enough that the Swiss in some places were travelling to Germany to buy groceries! To enforce this ""fixing"" of the Franc, the Swiss Central Bank announced that they would buy foreign currency in unlimited quantities by printing Francs. In reality, just announcing that they were going to do this was sufficient to discourage foreign investors from loading up on Francs. NPR's Planet Money did a really good job covering this topic:" "You sound like you know what you're talking about, but you say:  ""foreign buyers will laugh at them""  But the Wall Street Journal, 9/20/12, says that in the last quarter FOREIGN INVESTORS ARE FLOCKING TO BUY JAPANESE BONDS IN RECORD LEVELS even though the yields are very much below other industrialized countries. LOL" I wonder in this case if it might be easier to look for an emerging markets fund that excludes china, and just shift into that.  In years past I know there were a variety of 'Asian tiger' funds that excluded Japan for much the same reason, so these days it would not surprise me if there were similar emerging markets funds that excluded China.  I can find some inverse ETF's that basically short the emerging markets as a whole, but not one that does just china.  (then again I only spent a little time looking) That doesn't really matter. It's already figured out in the percentage. Japan makes more money but also has more debt.  What does matter is that Japan has a high probability of being damaged by natural disasters and losing hundreds of billions of infrastructure and goods. Not only that but as long as global temps rise the chance of major disaster rises with it. Greece is comparatively well insulated compared to Japan. If you were to say which nation looks better at a 100+ year projection you have to consider these things. The Tsunami that hit Japan was not large by geological standards and that means Japan has a reasonable probability of near total destructing in the coming centuries. Certainly not a good place to make a long term bet on. So the Japanese are better at the circle jerk.  An amusing note, if you pay attention to this stuff at all, you will notice that Japan can't actually just print the money.  The process you refer to is considered inflating the debt away.  When Japan prints money now, their currency gains value.  So they are actually pretty fucked.  http://www.zerohedge.com/news/2012-10-30/when-¥11-trillion-not-enough-japans-qe-9-disappoints-halflife-zero-time-qe10  edit:spelling/grammar sorry "Stock market indexes are generally based on market capitalization, which is not the same as GDP.  GDP includes the value of all goods and services produced in a country; this includes a large amount of small-scale production which may not be reflected in stock market capitalizations.  Thus the ratio between countries' GDPs may not be the same as the ratio of their total market capitalization.  For instance, US GDP is approximately 3.8 times as much as Japan's (see here), but US total market cap is about 5.5 as much as Japan's (see here). The discrepancy can be even more severe when comparing ""developed"" economies like the US to ""developing"" (or ""less-developed"") economies in which there is less participation in large-scale financial systems like stock markets.  For instance, US GDP is roughly 10 times that of Brazil, but US total market cap is roughly 36 times that of Brazil.  Switzerland has a total market cap nearly double that of Brazil despite its total GDP being less than half of Brazil's.  Since the all-world index includes all investable economies, it will include many economies whose share of market cap is disproportionately lower than their share of GDP. In addition, according to the fact sheet you linked to, that index tracks only large- and mid-cap stocks.  This will further skew the weighting to developed economies and to the US in particular, since the US has a disproportionate share of the largest companies. Obviously one would need to take a more detailed look at all the weights to determine if these factors account precisely for the level of discrepancy you see in this particular index.  But hopefully that explanation gives an idea of why the US might be weighted more heavily in a stock index than it is in raw GDP." "Yes, but the rates at which they're borrowing make all the difference.  Japan's central bank is borrowing at about 2 percent on a 30 year bond, and Greece is borrowing at 18 percent. Japan would thus be paying 4.6% of GDP on debt service for government borrowing, while Greece would thus be paying 27% (assuming that all current bonds could be converted to current rates).   [Japan](http://www.bloomberg.com/markets/rates-bonds/government-bonds/japan/), [Greece](http://www.ecb.int/stats/money/long/html/index.en.html).   Further, as many other commenters have noted, Japan retains the ability to print money and thus inflate their debt away, while Greece relies on the European Central Bank, which would not hyperinflate the entire Eurozone to help out Greece's government.  As a comparison, the US is currently paying 1.3% of its GDP on government debt service.   (My calculations are amateur. Please correct me if I'm wrong.)  As [Dean Baker notes](http://www.cepr.net/index.php/blogs/cepr-blog/the-devasting-interest-burden-of-the-debt):  ""It is important to remember that most of the people in Washington debates on economic policy do not know much economics. They tend not to be very good at arithmetic either. That is why they were blindsided by the collapse of the $8 trillion housing bubble that wrecked the economy.  As we get endless pontification about the crushing debt burden it is worth touching base with reality on occasion. In that spirit, CEPR brings you the latest data and projections on the ratio of the federal government's interest payments to GDP, courtesy of the Congressional Budget Office (CBO).  [T]he interest to GDP ratio is currently at a crushing 1.3 percent, near the post World War II low. However this figure overstates the burden somewhat. Last year the Federal Reserve Board refunded almost $80 billion to the Treasury. This was interest earned on government bonds and other assets it now holds. That leaves a net interest burden of 0.8 percent of GDP, by far the lowest of the post World War II era.""  **TL;DR**: what matters is not total size of debt alone, but also borrowing costs and ability to inflate the debt away. Japan is paying very little on its large debt; Greece is paying a lot.   **TL;DR TL;DR**: I'd like to borrow a few trillion dollars at 2%, too." A single fund that reflects the local currency would be an index fund in the country. Look for mutual funds which provide for investing on the local stock index. The fund managers would handle all the portfolio balancing for you. a) the quick answer to your correlation is quantitative easing. basically the central bank has been devaluing the US dollar, making the prices of all goods increase (including stocks.)  the stock market appear to have recovered from 2009 lows but its mainly an illusion. anyway the QE packages are very known when the correlation is not there, that means other meaningful things are happening such as better corporate earnings and real growth. b) the thinkorswim platform has charts for dollar futures, symbol /dx My view is that hedge funds and high-frequency traders tend to create this correlation because they're making directional bets on individual stocks, grouped as a whole, and then share these ideas with so many other funds (who, in turn, do the same thing).  I think Beta and inflated share prices are related to this effect, but are not the cause of this effect. I think the point is that m2 is 13.7 trillion usd, the Swiss investment is not even *half* a percent.  The us equities marker valuation is larger at 22.5 trillion USD. Dumping an extra 100 bil usd is too little to do anything. Even dumping a trillion USD  is a relatively small number. The Japanese stock market offers a wide selection of popular ETFs tracking the various indices and sub-indices of the Tokyo Stock Exchange.  See this page from the Japan Exchange Group site for a detailed listing of the ETFs being offered on the Tokyo exchange. As you have suggested, one would expect that Japanese investors would be reluctant to track the local market indices because of the relatively poor performance of the Japanese markets over the last couple of decades.  However, this does not appear to be the case.  In fact, there seems to be a heavy bias towards Tokyo indices as measured by the NAV/Market Cap of listed ETFs.  The main Tokyo indices - the broad TOPIX and the large cap Nikkei - dominate investor choice. The big five ETFs tracking the Nikkei 225 have a total net asset value of 8.5Trillion Yen (72Billion USD), while the big four ETFs tracking the TOPIX have a total net asset value of 8.0Trillion Yen (68Billion USD).  Compare this to the small net asset values of those Tokyo listed ETFs tracking the S&P500 or the EURO STOXX 50.  For example, the largest S&P500 tracker is the Nikko Asset Management S&P500 ETF with net asset value of just 67Million USD and almost zero liquidity.  If I remember my stereotypes correctly, it is the Japanese housewife that controls the household budget and investment decisions, and the Japanese housewife is famously conservative and patriotic with their investment choices.  Japanese government bonds have yielded next to nothing for as long as I can remember, yet they remain the first choice amongst housewives.  The 1.3% yield on a Nikkei 225 ETF looks positively generous by comparison and so will carry some temptations.