Chinese/Hong Kong investments

purch

who he proved wrong

I don't think it's a case of proving anyone wrong

Perceived widom on this board is that Investing in Premium Bonds is a mugs game........but 2 people win a Million every drawing, so for them it's a great 'Investment'

Gambling on the Horses isn't investing, but some people make a lot of money at it

Investment and Speculation are two totally seperate things

No one, I am sure wishes the Wombat anything other than success in his speculation on the Chinese market. All that is being pointed out is the many risks and also that is does not come under the heading of a sensible balanced Investment stategy

wombat42_2

I think the IFA approach to investment has its limitations. An IFA will sit down with you and work out a balanced portfolio intended to work for several years into the future. The dynamics of the market are not taken into consideration. The client is not expected to monitor the market on daily basis or fund switch to keep fine tuning his portfolio to market conditions. Some funds may just not be a good idea in some market conditions and new market opportinitues may arise at any time which were not originally anticipated.

Currently China is flying like crazy and I am taking advantage of a market opportunity and the chances are that the boom is good for another 6 months or so. The Chinese investors are very unlikely to just panic and sell up all of a sudden as they have virtually nowhere else to put their money (negative real interest rates on cash accounts and real estate not profitable for them).

I am closely following market conditions and could switch out of China at any time but suspect I will be OK for several months yet.

Isnt the UK a single country as well ?

Liz_the_Whizz

wombat42

Out of interest, how big is your investment in China in terms of numbers of 0000000s?

My PEP/ISA pot is not huge, I just wanted to get an idea of risk level as measured by actual cash invested.

I have some money in Far East funds but it's at a level where I could afford to lose it all if the worst happened, though I would not be very happy;)

dunstonh

I think the IFA approach to investment has its limitations. An IFA will sit down with you and work out a balanced portfolio intended to work for several years into the future. The dynamics of the market are not taken into consideration. The client is not expected to monitor the market on daily basis or fund switch to keep fine tuning his portfolio to market conditions. Some funds may just not be a good idea in some market conditions and new market opportinitues may arise at any time which were not originally anticipated.

Micro management can do more damage than good. Chasing the next best thing can work but it can also fail. How long do you stay in before you call it a day? What if the next best thing doesnt turn out to be the next best thing?

At the end of the day, you could get lucky or you could lose out. That is your investment strategy. Its a risky one but it is still a strategy. I wouldnt be too quick to dismiss sector allocation, asset allocation or HYP as limited though. They are designed to have less frequent reviews and do not carry the same level of risk.

wombat42_2

dunstonh wrote: »

Micro management can do more damage than good. Chasing the next best thing can work but it can also fail. How long do you stay in before you call it a day? What if the next best thing doesnt turn out to be the next best thing?

At the end of the day, you could get lucky or you could lose out. That is your investment strategy. Its a risky one but it is still a strategy. I wouldnt be too quick to dismiss sector allocation, asset allocation or HYP as limited though. They are designed to have less frequent reviews and do not carry the same level of risk.

I am not taking it that far. I read up on a daily basis, the latest predictions about the Chinese markets at different times in the future, so I can take a strategic view, not making snap decisions purely on daily trends in the market. Probably in a few months I will play relatively safe and switch to UK equity income funds.

wombat42_2

Liz_the_Whizz wrote: »

wombat42

Out of interest, how big is your investment in China in terms of numbers of 0000000s?

My PEP/ISA pot is not huge, I just wanted to get an idea of risk level as measured by actual cash invested.

I have some money in Far East funds but it's at a level where I could afford to lose it all if the worst happened, though I would not be very happy;)

We're talking approaching 5 zeros. At present I feel more nervous about all the non-Chinese stock markets (because of all the subprime stuff) than China. But that could change. Maybe next month I start feeling nervous about China and more comfortable about the other markets so I do a fund switch. I hardly expect to wake up one morning and find my China investments have sunk without trace all of a sudden. Almost everything is engineered by the Chinese state and it is commonly believed that they would not want a crash this side of the Olympics.

nrsql

I would be cautious about taking what you read as gospel.
You will natural give more weight to things that you want to hear.

Also - whoever is writing the article doesn't have a main objective of giving you information to run your portfolio. I wouldn't say they would be deliberately misleading (well actually sometimes I would) but it's very easy to word an article to give an impression. How much credance do you give to estate agents talking about the housing market? Look at what analysts were saying at the time of the dot com boom. How many investment funds say that maybe now is not a good time to invest - leave it another couple of years?
That's why I say it's a good idea to invest and move sectors in tranches. You will never have enough correct information to make a decision - and even if you do the market doesn't move on value so your decision will also be about what other people are thinking.

wombat42_2

nrsql wrote: »

I would be cautious about taking what you read as gospel.
You will natural give more weight to things that you want to hear.

Also - whoever is writing the article doesn't have a main objective of giving you information to run your portfolio. I wouldn't say they would be deliberately misleading (well actually sometimes I would) but it's very easy to word an article to give an impression. How much credance do you give to estate agents talking about the housing market? Look at what analysts were saying at the time of the dot com boom. How many investment funds say that maybe now is not a good time to invest - leave it another couple of years?
That's why I say it's a good idea to invest and move sectors in tranches. You will never have enough correct information to make a decision - and even if you do the market doesn't move on value so your decision will be about what other people are thinking.

I use Google Alerts to get opinions on China from a whole range of sources and I am well aware of spin used by vested interests.

dipsomaniac

this thread should be in the gambling section as it has little to do with investing.

Just come across this thread. It reminds me very much of an older thread where someone borrowed 10 or 20k on an interest free credit card and gambled it on a single UK company share. He doubled his money as far as I can remember - not sure if he got out in time though to relaise his gains.

He had a few detractors who he proved wrong, so here's hoping you can do the same. Good luck!

how can you say he proved his detractors wrong when you don't know if he got out in time or even made a profit - have you never met a gambler who only talks about his winnings??

china is being talked about in very simplistic terms and in a way that people know what is going to happen - nobody knows what is going to happen. if is was that simple you would have ££trillionaire's in this world.

the best investors will all say that they are in it for the long term and the basic principles of investing haven't changed. basic company principles haven't changed. it is all about asset allocation and spreading you risk. you will pick some winners but will also pick losers.

i know it is popular to knock ifa's but it is easily forgotton that ifa's are responsible for investing other peoples money. most people aren't gamblers or financially astute and want to see a return from there hard earning money. as an ifa it is not my risk profile that i am investing their money on. i need to build a balanced portfolio based on their objectives and risk profile so that we can both sleep at night. even if it was a good investment stategy how many people could afford to have an investment specialist working 24/7 on their behalf to hopefully get them that extra 1%. in my view a return of 12% per annum over the long term is pushing at boundaries.

wombat42_2

dipsomaniac wrote: »

this thread should be in the gambling section as it has little to do with investing.



how can you say he proved his detractors wrong when you don't know if he got out in time or even made a profit - have you never met a gambler who only talks about his winnings??

china is being talked about in very simplistic terms and in a way that people know what is going to happen - nobody knows what is going to happen. if is was that simple you would have ££trillionaire's in this world.

the best investors will all say that they are in it for the long term and the basic principles of investing haven't changed. basic company principles haven't changed. it is all about asset allocation and spreading you risk. you will pick some winners but will also pick losers.

i know it is popular to knock ifa's but it is easily forgotton that ifa's are responsible for investing other peoples money. most people aren't gamblers or financially astute and want to see a return from there hard earning money. as an ifa it is not my risk profile that i am investing their money on. i need to build a balanced portfolio based on their objectives and risk profile so that we can both sleep at night. even if it was a good investment stategy how many people could afford to have an investment specialist working 24/7 on their behalf to hopefully get them that extra 1%. in my view a return of 12% per annum over the long term is pushing at boundaries.

I am getting a little bored with this IFA perspecitive. If an IFA advised me to invest entirely in China for the next few years - he would of course be completely irresponsible. It is much better if the client himself knows enough to work out what to invest in and how long for. The mechanics of switching is no big deal - they are usually free. I am unlikely to be investing in China for the long term so I dont care that much about China in 5 years time.

Some weeks the rises in China have been typical rises for a whole year for some markets.

Another thing about IFAs - they are not really responsible for their clients money. They will never personally suffer if a clients investment which they recommended fails to perform. There is always the suspicion that IFA are inclined to recommend those products with most commision for them.