Ten years ago the British handed control of Hong Kong back again 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 initially to blossom. The Chinese economy started looking more and more just like 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 grows. Now the GDP of China is expected to increase a lot more than 10% every year. Invest in gas&oil This economic growth is so exciting that Jim Rogers, one of the best money managers of our time, uprooted his entire family and moved to Asia. When asked why, he explained “I really do not need to offer Chinese stocks. I wish to own them forever and I want my [four year-old] daughter to own them.”
Now that’s what I call a long haul investment strategy.
During the last few years, investors have made tons of profit the Chinese markets. If you had bought China 25 Index at the start of 2005 you’d have made a lot more than 315% on your cash by October 2007.
Though 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 it turns out I was right. but a little early on my call.
The index started falling in October of 2007. During 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. From the the influence China had when I was working 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. Because scenario, the Shanghai market might fall further. Some advisors have gone in terms of suggesting that individuals avoid the Chinese markets entirely.
I do believe they are horribly wrong and somewhat shortsighted.
Unless you’re focused on 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 continues to be in the early stages of build out.
Don’t let the recent market correction scare you away. Consider it as a good 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 totally free 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 need to use today.