The ideal Time for them to Invest in China

10 years ago the British handed control of Hong Kong back once again to the Chinese.  This is the start of massive changes compared to that economy.  State controlled companies were placed in private hands and small business started to blossom.  The Chinese economy started looking more and more such as for instance a free market.

The 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 increase a lot more than 10% every year.  This economic growth is indeed 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 sell Chinese stocks.  I wish 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 great deal of money in the Chinese markets.  If you’d bought China 25 Index from the beginning 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 only a little out of control last year.  As a matter of fact Gas and Oil production, in May I warned of a near term bubble.  As as it happens I was right. but only a little in the beginning my call.

The index started falling in October of 2007.  Throughout the last couple of months, it had fallen almost 33%.

Currently, China is emerging from an economic slumber.  Politically, they’re a communist country.  Economically, they’re waking up to a free market revolution.  From the 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.  Because scenario, the Shanghai market might fall further.  Some advisors have gone so far as suggesting that we prevent the Chinese markets entirely.

I think they’re horribly wrong and a bit 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 first stages of a multi-decade economic expansion.  Their economic growth is second-to-none, and their infrastructure continues to be in the first stages of build out.

Don’t let the recent market correction scare you away.  Think of it as a great way to expand your emerging market exposure at a 30% discount. An effective way to have broad contact with the Chinese market is through the iSharesFTSE/Xinhua China 25 Index ETF (FXI).

Brian Mikes could be the editor of the Dynamic Wealth Report, a 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 assist you discover profitable trading ideas you need to use today.

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