TRADEWAR
When Chinese stocks move, they REALLY MOVE – regardless of what’s going on in the U.S. Three separate times in the past dozen years, the entire index of Chinese A-shares has delivered triple-digit returns within 18 months. Don’t get me wrong... Chinese stocks DON’T ALWAYS go up when U.S. stocks go down. The important thing to know is this: Out of all the major stock markets, China is the least correlated to the U.S. When U.S. stocks fall, European stocks will likely fall. Japanese stocks will likely fall, too – but Japanese stocks are less likely to fall than European stocks. They are slightly less correlated to U.S. stocks, based on history. Chinese stocks are yet another step removed beyond Japan... Simply put, China’s stock market is not as affected by what happens in the U.S. stock market, compared with most other countries. This correlation has been changing... As China becomes more open and more integrated with the global economy, China’s stock market is becoming more correlated to the rest of the world than it used to be. But it is still the least correlated major market to the U.S. stock market. To sum it up... could Chinese stocks fall if (and when) the U.S. stock market falls? Absolutely! But they don’t have to. And they will probably fall less than other assets. So are Chinese A-shares a good investment for the next five years? Absolutely!
As you can see, during the first three months of 2000, Chinese A-shares soared, right in line with the Nasdaq. Then, the Melt Down in U.S. stocks arrived in March 2000. The Nasdaq crashed. But look at what happened to Chinese stocks... They kept going up! During the biggest U.S. stock crash of our lifetimes, Chinese stocks soared 64% – to all- time highs. Throughout his career, Dr. Steve Sjuggerud has addressed hundreds of financial conferences in the U.S. and around the world, including at the New York Stock Exchange. He has also appeared in the media, including Bloomberg, Fox Business News, the Wall Street Journal , and Forbes . Steve holds a doctorate in finance and has worked as a stockbroker, vice president of a $50 million global mutual fund, and a hedge-fund manager. Steve is editor of True Wealth , an investment advisory that specializes in safe, unique alternative investments overlooked byWall Street. He recommends opportunities based on the simple idea that you don’t have to take big risks to make big returns. His subscribers have made significant gains following his advice on China and Chinese stocks. If you’d like to take control of your investing and get recommendations each month about the best stocks to buy.
98 June 2018
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