The time has come to invest in the world's most populated country and 2nd largest economy!
If you're a novice investor and you're looking to buy stocks and get into the China stock market, there are many quality Chinese listed companies that are trading in the U.S. like:: (PTR - Petro China, BABA - Alibaba, and NTSE - NetEase) that remain in our sights. Today, Chinese stocks are the cheapest they’ve been in comparison to the S&P 500 in 2 decades. The data coming out of China, shows some green shoots, that are actually very encouraging. This trade war could be long and drawn out, but for the investors that can see beyond the horizon and withstand some volatility, looking at the emerging markets, more importantly China, might be appropriate. The Chinese consumer is alive and well, just dealing with the ever present loom of the trade war.
It is understandable that many investors will remain wary of owning China shares. After all, it is a communist country that suppresses free speech, jail’s people, limits Internet content and uses state-run companies, like banks, to direct where the money is invested. With that said, smaller consumer companies have a great deal of freedom, and the ruling Communist Party has an big interest in promoting economic growth for its people in order to keep unrest at bay. As the Chinese people get richer, they will want more of the finer things in life like traveling, entertainment, education and future prosperity.
Trumps Trade war hasn’t just hurt American farmers and Chinese exporters; it has also hit U.S. investors who dumped $2.8 billion into China funds in essentially the first quarter 2019 on top of the $6.4 billion they added in 2018.
The next phase of the trade war entails significantly more uncertainty for the consumers in the US economy. The Trump administration plans to tax an additional $300 billion of Chinese imports annually would affect a broad range of everyday consumer goods, including about 80% of all clothing imports, 65% of furniture and equipment, and 90% of durable goods.
So, know right now there will be volatility. But that may wind up in the long run being a good thing! Emerging markets stocks have always been rocky, but China stocks have been even rockier. With so many investors worrying about China, stock prices have been oversold off and, in many cases, become very attractive. If you don’t have China stocks in your portfolio, we are urging now is the time to be adding some.
In all of history, no economy has made as big of a leap in such a quick period of time as China has in the last 100 years. With a country with over 1.1 billion people who not so long ago relied on the bicycles as their primary form of transportation, they are today the world's biggest automobile manufactures. To boot: They are also the world's largest smart phone maker and are set to surpass the US as the biggest retail market in this year. I reiterate that understand the magnitude that China is the world's second-largest economy number 2 to the U.S.
Despite the current pessimism, there may eventually be a tariff-killing trade deal between the U.S. and China. It may even be possible for us to see one soon, according to analysts at Credit Suisse. On Aug. 13, the office of the U.S. Trade Representative said some tariffs the U.S. had planned to place on imports from China on Sept. 1 would be delayed until Dec. 15 and that some tariffs would be removed entirely.
It is important to understand that the most important thing to remember about trading in China today is they are capable of self sustained fast paced economic growth, so it is important to know the real risk in investing in china today is that - it’s risky not to invest there!
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