China investments

beetleboy72

China investments falling through the floor! Sit tight or bail out while still in the green?

lozzy1965

Consider porcelain maybe?

Sorry, I'm in one of those moods today

Reaper

China seems to be hammering its biggest companies because they were getting too powerful. So I don't think this is a temporary downturn that it will bounce back from, but with all predictions about the future - nobody really knows.

Albermarle

beetleboy72 said:

China investments falling through the floor! Sit tight or bail out while still in the green?

I think the clever answer is that China should only be a small part of an investment portfolio , so the effect should not be that great .

Neruda

beetleboy72 said:

China investments falling through the floor! Sit tight or bail out while still in the green?

Buy the dip.

Ten Cent has a billion users and a range of fantastically profitable products, including the main payments system that those billion people use every day. The Chinese government obviously wants to take control of such a strategic asset and so investors will only get a share of future profits rather than all of them, but I still want my slice of that pie. Similar remarks apply to a lesser extent to most of the companies affected.

MaxiRobriguez

Chinese political influence has long been a risk that investors needed to consider if overweighting China. 

We've been in this situation before where Chinese stocks dropped double digits after government interference. Previously the Communist party relaxed their stance somewhat in the face of that pressure but who knows this time?

I'm still overweight China - it's 15% of my portfolio so significantly higher than most (and what most would suggest was reasonable), for reasons Neruda above has suggested but also because valuations are attractive (precisely because of the political uncertainty).

Aggressive investors might want to buy the dip, anyone who's afraid of volatility should stay clear, not just now but for the foreseeable future. 

Linton

Atgreeing with Albermarle at greater length:
China investments haven't fallen through the floor, they are simply back to what they were less than a year ago.  You should set up your investments in the expectation that you are investing for the long term and not be diverted by short term events.

I do not believe China is going to disappear, quite the reverse.  However it is riskier than more established areas so arguably 10% China is the maximum reasonable allocation even with a higher risk portfolio .  The effect on your overall investments of the fall so far should be no more than 1%.

C_Mababejive

I#m in First state Asia focus and im not worried. It has around 24% chinese allocation.

https://www.trustnet.com/factsheets/o/m8ls/first-state-asia-focus-b-acc-gbp

dunstonh

We have hardly any direct exposure to China in most of our portfolios.  However, even if we did, it is an area where you would only have single-digit exposure normally and you know China investments are capable of losing 80% in 12 months.   So, if it happens, it shouldn't worry you.

And mirroring the comments above, if you feel this is falling through the floor seeing that it's still higher than less than a year ago, then are you sure you have the right level of exposure and tolerance for that sort of volatility.

MX5huggy

What % of the US stock market is made up of Chinese companies? Because while my FTSE All world is 4.5% China I expect that doesn’t include these US listed companies. https://www.bbc.com/news/business-57979857

Thrugelmir

The political risk has always existed and lingered in the shadows. Set your risk exposure accordingly. Personally I've always remained underweight. China's version of capitalism is very different to that of the Western world. All Chinese companies work for the benefit of the state and the people first, not shareholders. 

Even the big US Corporates with large Chinese operations have to tread very carefully. As China is a huge market for them. Sponsorship of the 2022 winter games in China by some may prove interesting. Going to make headlines for all the wrong reasons.