The proper Time and energy to Invest in China

10 years ago the British handed control of Hong Kong back again to the Chinese.  This was the start of massive changes to that particular economy.  State controlled companies were put into private hands and business began to blossom.  The Chinese economy started looking more and more like a free market.

The result was incredible growth.

China has significantly more than 1.8 billion citizens and as their economy develops, the middle class grows.  Now the GDP of China is expected to increase significantly more than 10% every year Guizhou Panjiang International Business Solution.  This economic growth is really exciting that Jim Rogers, one of the greatest money managers of our time, uprooted his entire family and moved to Asia.  When asked why, he said “I actually do not want to market Chinese stocks.  I wish to own them forever and I want my [four year-old] daughter to possess them.”

Now that’s what I call a long term investment strategy.

Throughout the last several years, investors have made tons of profit the Chinese markets.  If you had bought China 25 Index at the start of 2005 you would have made significantly more than 315% on your money by October 2007.

However the excitement in the Chinese markets got a little out of hand last year.  As a matter of fact, in May I warned of a near term bubble.  As it turns out I was right. but a little early on my call.

The index started falling in October of 2007.  Throughout the last few 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 free market revolution.  I remember the influence China had when I was in Singapore.  It included language, social customs, food, and even economics.  Now they’re influential the world over.

In the temporary, the outlook appears uncertain.  Some economists believe the economic slowdown in the United States could spread to emerging markets.  For the reason that scenario, the Shanghai market might fall further.  Some advisors have gone in terms of suggesting that people avoid the Chinese markets entirely.

I believe they are horribly wrong and a little shortsighted.

Unless you’re focused on very temporary trading, now’s the time to go long China.  The united states is in the early stages of a multi-decade economic expansion.  Their economic growth is second-to-none, and their infrastructure continues to be in the early stages of build out.

Don’t let the recent market correction scare you away.  Think of it as a good way to expand your emerging market exposure at a 30% discount. A great 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 gives 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 help you discover profitable trading ideas you need to use today.

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