The perfect Period to Invest in China
The perfect Period to Invest in China
10 years ago the British handed control of Hong Kong back to the Chinese. This is the start of massive changes to that particular economy. State controlled companies were put in private hands and small company started to blossom. The Chinese economy started looking more and more such as for instance a free market.
The end result was incredible growth.
China has a lot more than 1.8 billion citizens and as their economy develops, the middle-income group grows. Now the GDP of China is expected to boost a lot more than 10% every year guizhou panjiang refined coal. This economic growth is so exciting that Jim Rogers, one of the finest money managers of our time, uprooted his entire family and moved to Asia. When asked why, he said “I actually do not need to offer Chinese stocks. I do want to own them forever and I would like my [four year-old] daughter to own them.”
Now that’s what I call a long haul investment strategy.
Throughout the last few years, investors have made a lot of money in the Chinese markets. If you’d bought China 25 Index at the start of 2005 you’d have made a lot more than 315% on your cash by October 2007.
However the excitement in the Chinese markets got a little out of control last year. As a matter of fact, in May I warned of a near term bubble. As as it happens I was right. but a little in early stages my call.
The index started falling in October of 2007. Throughout the last several months, it’d fallen almost 33%.
Currently, China is emerging from an economic slumber. Politically, they’re a communist country. Economically, they’re waking up to free market revolution. I remember the influence China had when I was employed in Singapore. It included language, social customs, food, and even economics. Now they’re influential the planet over.
In the temporary, the outlook appears uncertain. Some economists believe the economic slowdown in the United States could spread to emerging markets. For the reason that scenario, the Shanghai market might fall further. Some advisors have gone so far as suggesting that people steer clear of the Chinese markets entirely.
I think they are horribly wrong and a bit shortsighted.
Unless you’re dedicated to very temporary trading, now could be the time for you to go long China. The nation is in the early stages of a multi-decade economic expansion. Their economic growth is second-to-none, and their infrastructure remains in the early stages of build out.
Don’t allow recent market correction scare you away. Consider it as an effective way to expand your emerging market exposure at a 30% discount. A great way to have broad experience of the Chinese market is through the iSharesFTSE/Xinhua China 25 Index ETF (FXI).
Brian Mikes is the editor of the Dynamic Wealth Report, a free of charge investment newsletter that provides investment ideas and news you can’t get from the mainstream investment press. Brian and his team bring decades of Wall Street and Silicon Valley experience to help you discover profitable trading ideas you can use today.