Gone Completely Chinese

wombat42_2

To help dampen the soaring Shanghai market, individual Chinese investors will now be allowed to invest into Hong Kong which was previously reserved for Westerners.
http://online.wsj.com/article/SB1187610633...hs&ru=yahoo

This is great news if you have invested in China Jupiter & Gartmore China Opps etc which mainly invest in Hong Kong

jamesd

Well, it's great news in the sense that people mortgaging their houses to bet on the market will now be able to speculate in HK as well.

At the moment you're writing like a stock broker encouraging people to invest at the top of the tech bubble or Japanese boom years by falsely comparing the risk of one of the most volatile markets there is with a comparatively stable and safe market like the FTSE100. The two are worlds apart in risk.

There's absolutely nothing wrong with suggesting Chinese funds like those in HK... but please don't continue to grossly misrepresent the risk level involved.

wombat42_2

jamesd wrote: »

Well, it's great news in the sense that people mortgaging their houses to bet on the market will now be able to speculate in HK as well.

At the moment you're writing like a stock broker encouraging people to invest at the top of the tech bubble or Japanese boom years by falsely comparing the risk of one of the most volatile markets there is with a comparatively stable and safe market like the FTSE100. The two are worlds apart in risk.

There's absolutely nothing wrong with suggesting Chinese funds like those in HK... but please don't continue to grossly misrepresent the risk level involved.

If you read my other posts on the subject I have represented China as hi potential but hi risk. The fact that the Chinese can now invest in HK in itself has to be a plus factor for that market. I have put my money where my mouth is but i dont expect every tom, !!!!!! or harry to do the same.

Aegis

wombat42 wrote: »

If you read my other posts on the subject I have represented China as hi potential but hi risk. The fact that the Chinese can now invest in HK in itself has to be a plus factor for that market. I have put my money where my mouth is but i dont expect every tom, !!!!!! or harry to do the same.

I would imagine a lot of people said that about the technology sector too... I wonder how many of them have actually managed to get their money back after the crashes that massively devalued what was touted as the future most profitable investment avenue?

I hope you realise that people here are advocating caution rather than telling you you're wrong. The Chinese market is definitely growing strong at the moment, but that doesn't mean it won't crash at some point, and that point might be determined by a single incident that has an unexpected cascading effect of shaking investor confidence in the market. It wouldn't be the first time, and it won't be the last!

wombat42_2

Aegis wrote: »

I would imagine a lot of people said that about the technology sector too... I wonder how many of them have actually managed to get their money back after the crashes that massively devalued what was touted as the future most profitable investment avenue?

I hope you realise that people here are advocating caution rather than telling you you're wrong. The Chinese market is definitely growing strong at the moment, but that doesn't mean it won't crash at some point, and that point might be determined by a single incident that has an unexpected cascading effect of shaking investor confidence in the market. It wouldn't be the first time, and it won't be the last!

Yes i have done a lot of reading on China's economy and predictions of a crash. The opinion of quite a few is that the market will have a correction in the short term but long term prospects are good. Some say that the Chinese government wouldnt allow a crash before the Olympics. Personally I have a good solid cash buffer and can leave my Chinese investments invested for the long term if need be. And if all goes pear shaped it wouldnt quite be jumping out of a tall building time for me.

Also please remember that the Hong Kong market (which is where the finds are invested) is not quite as risky as the Shanghai market. The Hong Kong market is a mature market.

Also at present anyway it is just about the only world market unzapped by the credit crunch subprime thing.

purch

The problem with the China market as far as I am concerned is the lack of 'history' and lack of 'experienced' investors...or at least investors with a track record.

This is a feature of many 'bubble' markets over the years.

I agree with you that China, the Chinese economy and, with it's influence on the region other Far East economies, are the potential growth areas in the World economy over the next decades...

But in terms of 'risk' these markets are probably off the charts compared to many previous or current high risk investments...

Speaking as somone who lost 98% of an investment in the Bombay stockmarket in the late 80's virtually overnight.........I believe putting all your eggs into the Chinese 'basket' could mean having to face up to losing 50-60% of your investment over a very short space of time, with virtually no way of extracating yourself from the investment.

If you are happy to take that risk on board...and maybe wait a good few years for your investment to recover then all strength to you cos the rewards will probably be huge over the medium term in these markets.

wombat42_2

purch wrote: »

The problem with the China market as far as I am concerned is the lack of 'history' and lack of 'experienced' investors...or at least investors with a track record.

This is a feature of many 'bubble' markets over the years.

I agree with you that China, the Chinese economy and, with it's influence on the region other Far East economies, are the potential growth areas in the World economy over the next decades...

But in terms of 'risk' these markets are probably off the charts compared to many previous or current high risk investments...

Speaking as somone who lost 98% of an investment in the Bombay stockmarket in the late 80's virtually overnight.........I believe putting all your eggs into the Chinese 'basket' could mean having to face up to losing 50-60% of your investment over a very short space of time, with virtually no way of extracating yourself from the investment.

If you are happy to take that risk on board...and maybe wait a good few years for your investment to recover then all strength to you cos the rewards will probably be huge over the medium term in these markets.

I have two strategies:

1/If the markets still fly for a couple of years without a crash or large correction i would probably cash in having made a decent profit

2/ If there was a crash or large correction I would probably hold out for the long term 10 years plus - and as you say, things may well work out long term even if there is a short term set back.