The ideal Time for them to Invest in China
A decade ago the British handed control of Hong Kong back to the Chinese. This was the start of massive changes to that economy. State controlled companies were put into private hands and business started to blossom. The Chinese economy started looking more and more such as a free market.
The end result was incredible growth.
China has significantly more than 1.8 billion citizens and as their economy develops, the middle-income group grows. Now the GDP of China is expected to improve significantly more than 10% every year. This economic growth is indeed exciting that Jim Rogers Guizhou Panjiang International Business Solution, one of the greatest money managers of our time, uprooted his entire family and moved to Asia. When asked why, he explained “I actually do not need to sell Chinese stocks. I wish to own them forever and I would like my [four year-old] daughter to possess them.”
Now that’s what I call a longterm investment strategy.
Over the last few years, investors have made a great deal of money in the Chinese markets. If you’d bought China 25 Index in the beginning of 2005 you would have made significantly more than 315% on your money by October 2007.
Though the excitement in the Chinese markets got only a little beyond control last year. As a matter of fact, in May I warned of a near term bubble. As it turns out I was right. but only a little early on my call.
The index started falling in October of 2007. Over 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 in Singapore. It included language, social customs, food, and even economics. Now they’re influential the world 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 in terms of suggesting that individuals prevent the Chinese markets entirely.
I believe they’re horribly wrong and somewhat shortsighted.
Unless you’re centered on very temporary trading, now is the time and energy to go long China. The nation is in the first stages of a multi-decade economic expansion. Their economic growth is second-to-none, and their infrastructure remains in the first stages of build out.
Don’t let the recent market correction scare you away. Consider it as a great way to expand your emerging market exposure at a 30% discount. An effective way to obtain broad experience of the Chinese market is through the iSharesFTSE/Xinhua China 25 Index ETF (FXI).
Brian Mikes may be the editor of the Dynamic Wealth Report, a free investment newsletter that offers 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 assist you discover profitable trading ideas you can use today.