Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Buy China Stocks Instead of ETF's on the Stock Market Dips

Stock-Markets / China Stocks Apr 23, 2008 - 03:24 AM GMT

By: Money_and_Markets

Stock-Markets

Tony Sagami writes: When it comes to China, the media has been focused on the riots in Tibet and the protests following the Olympic torch around the globe.

For emerging market investors, getting swept away by newspaper headlines is a huge, not to mention costly, mistake.


To be sure, China has some major political and social obstacles to navigate going forward. The situation in Tibet is not pretty, and the Olympic Games are fast becoming a PR nightmare for Beijing.

But don't let yourself be distracted from the underlying economic picture, which continues to be stellar.

As evidenced by the latest economic news ...

China's Economy Is on Fire!

The final Chinese GDP numbers for 2007 were released last week. They were revised upward from 11.5% to 11.9%. That is the fastest growth rate in 13 years, which means the Chinese economy is picking up steam ... not slowing down!

What's driving those red-hot GDP numbers? Consider the following ...

Auto sales have exploded across China, with over 500,000 people driving new cars off the showroom floor each month.
Auto sales have exploded across China, with over 500,000 people driving new cars off the showroom floor each month.

Arrow Retail sales jumped by 20.2% in the first two months of this year, highlighting a 33.8% increase in auto sales. An interesting fact: Over half a million new autos are hitting the streets in China every month!

Arrow The lifeblood of a growing economy, foreign investment, continues to gush into China. Foreign Direct Investment (FDI) jumped by an amazing 61.3% to $27.4 billion in the first quarter of this year. Hong Kong, the British Virgin Islands (offshore money), and Singapore were the top three sources of new foreign funds.

Arrow Anybody worried about the slowing U.S. economy affecting Chinese imports is dead wrong. The Chinese trade surplus expanded by $41 billion in the first quarter, an impressive 40% increase over the previous year.

Arrow The World Bank reported that China is now the world's second-largest economy as measured by purchasing power. The U.S. is in first place, with Germany in third. Now you know why U.S. companies are racing to get their piece of China's economic pie.

Arrow The Chinese war chest of cash keeps getting bigger. Net foreign reserves increased by $61.6 billion in January, $57.3 billion in February, and $35 billion in March to total $153.9 billion for the year.

Arrow Remember when people used to talk about Fidelity Magellan moving the market with its $100-plus billion in assets? The Chinese national pension fund said it expects to double in size to over $143 billion by the end of 2010. The people running the fund know what they're doing, too; it earned a 43.2% return in 2007.

And all that gushing good news was just released in the last week!

In stark contrast to China, what kind of economic news did you hear out of the U.S. last week? Well, let's see now ...

Consumer confidence fell to a 26-year low ...

Foreclosures were up 57% in March ...

Oil burst through $115 a barrel ...

Initial jobless claims surged to a post-Hurricane Katrina high ...

And Citigroup posted a $5.1 billion first-quarter loss and announced 13,200 layoffs.

You see, unlike the U.S. economy which is rolling over into a recession, the Chinese economy continues to grow at a double-digit pace. So, unhitch your wagon from the nag and saddle up to the fastest thoroughbred.

Oh, and just remember ...

Buying China on the Dips Has Been An Extremely Profitable Strategy

As civil unrest and political turmoil in China have dominated headlines around the globe, the Shanghai Composite has fallen 49% from its October peak. The 34% drop in the first quarter was the worst ever in China's history and last week's 11% decline is the worst in over a decade.

Would it surprise you to learn that these types of drops aren't uncommon in China? The Shanghai Index lost 55% from June 2001 and July 2005, years in which the Chinese economy grew by an average of 9.5% a year.

Buying the dips in China has proven to be a highly lucrative strategy among wealthy investors.
Buying the dips in China has proven to be a highly lucrative strategy among wealthy investors.

As you can see, investing in China can be a roller coaster ride, but buying on these dips has been ... and will likely continue to be ... an extremely profitable strategy. After all, anybody who was smart enough to buy after that last 55% plunge saw the Shanghai Composite rocket higher by more than 600% in two short years!

Yeah, that's right ... the smart money pocketed a 600% return!

Today isn't any different. Unlike the dot-com pieces of junk that didn't make money or even have viable business plans, the Chinese companies that are now on sale are part of the foundational building blocks of the Chinese economy — construction, retail, energy, finance, health care, food, and transportation firms.

We're talking about real companies with real profits. And you now have the opportunity to buy their stocks at a 50% discount!

Is today the absolute bottom? I can't say for sure, but I think you'll be very happy with the results a year or two down the road if you take the plunge now.

My Suggestion: Invest Alongside Chinese Entrepreneurs

I still like individual stocks better than Exchange Traded Funds (ETFs) or mutual funds. Why? ETFs and mutual funds are typically packed with State Owned Enterprises, companies run by Communist Party members for the benefit of the Communist Party, and not the shareholders like you and me.

Meanwhile, you can invest right alongside the Chinese entrepreneurs that are working their butts off to grow their businesses. They get rich only if you get rich, too. I like that deal!

I'm talking about entrepreneurs like Michael Yu, a former professor at Beijing University whose company has taught English to 4.5 million Chinese students. Or Neil Shen, a Yale-educated former head of Deutsche Bank who co-founded the largest travel company in China.

But remember, no matter what you do, don't let headlines designed to sell newspapers dissuade you from taking advantage of the great investment opportunities in China!

Best wishes,

Tony

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules