Unless you are hiding in the cave (which is a good thing to do from time to time), you must have read about the news in China.The much anticipated fanfare about the post Covid did not take place much to the disappointment of both hedge funds and retail investors. In short, the Chinese are simply not spending as much as we thought. Government are doing what they can to help shore up the economy but it takes time for confidence to come back. The property market is still in a doldrum and many Chinese have suffered in this area. Perhaps, they are less inclined to invest in the stock market now.
We know the Chinese are savers so I believe this Covid saga has brought much fear, uncertainty about the future for them so savings become a go to route, increasing their savings to prepare for uncertain times ahead.
If you have invested in China, example the FXI ETF since 2020, then you are likely to be in the red. (just like me). That is why , I advocate the importance of geographical diversification. US market on the other hand has been on a good rally mode and the overall loss can be compensated here.
I am selectively choosing those good managed companies and align with what the CCP direction and doing more homework and increasing stakes in certain US tech stocks as it continue to ride the trend.
When will China turn around? Your guess is as good as mine. I believe the government will continue to pump support (maybe not as aggressive as before) to help the economy and Q3 will be a important time frame to watch for it to pivot. Almost all the negative news are over now in China so the downside is low while the upside is much higher over the long term. FXI has to remain above 25 price level , if it breaks below, I will be more cautious as it is likely to revisit its previous low of 21 in Oct 2022. It is possible to make another low or new low before it reverse its trend. So, please do not invest all your money just because it is at bottom now. One will never know how long the low can stay and if you have limited capital, it makes more sense to diversify.
We know the Chinese are savers so I believe this Covid saga has brought much fear, uncertainty about the future for them so savings become a go to route, increasing their savings to prepare for uncertain times ahead.
If you have invested in China, example the FXI ETF since 2020, then you are likely to be in the red. (just like me). That is why , I advocate the importance of geographical diversification. US market on the other hand has been on a good rally mode and the overall loss can be compensated here.
I am selectively choosing those good managed companies and align with what the CCP direction and doing more homework and increasing stakes in certain US tech stocks as it continue to ride the trend.
When will China turn around? Your guess is as good as mine. I believe the government will continue to pump support (maybe not as aggressive as before) to help the economy and Q3 will be a important time frame to watch for it to pivot. Almost all the negative news are over now in China so the downside is low while the upside is much higher over the long term. FXI has to remain above 25 price level , if it breaks below, I will be more cautious as it is likely to revisit its previous low of 21 in Oct 2022. It is possible to make another low or new low before it reverse its trend. So, please do not invest all your money just because it is at bottom now. One will never know how long the low can stay and if you have limited capital, it makes more sense to diversify.
Comment:
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Comment:
after 4 months or so, we are seeing strong rally in the SPX versus the tepid moves in China, much to the disappointment of many investors. It is all interconnected - low job growth leads to wages tightening, people are afraid to spend more - that leads to lower demand, less workers needed to maintain - lead to retrenchment - leads to confidence weaken, saves more and spend less, a sort of disflationary enviroment where everyone waits for the next person to do something to stir the pot