Tumble of Nikkei not a trend

NEW YORK – The Nikkei’s plunge this past week made the headlines around the world, but what’s really worth noting is how well Japanese stocks have done since 2000.

While U.S. stocks spent much of 2005 supine, Japan and other foreign markets, especially the Euro-zone countries, booked superb performances. Their outlook for this year is just as upbeat.

Japanese stocks rose 24.83 percent between 2000 and 2005. And despite the Nikkei’s 6.7 percent decline in the three days of trading ending with Tuesday’s early close, the market is expected to have another solid performance for the year.

European equities have been marching up since March 2003; today they are roughly 90 percent higher than they were then, according to Merrill Lynch. German stocks rose 50 percent in 2005.

U.S. investors have been putting their money where the growth is. In 2005, they put more money into international stock funds than domestic funds for the first time in more than 20 years, according to Merrill Lynch.

It looks like that trend is continuing. During the four weeks that ended Jan.4, 2006, investors pulled $2.07 billion out of U.S. domestic equity funds, while they invested $802.5 million in international stock funds, according to a report by Bank of America.