Are China Funds a good long term investment?

Question

I am not much of a risk taker with money....but I need to reap better rewards than what I am currently getting. Any opinions would help greatly...thank you!

Keep the opinions coming...Really helpful!!!

Answer 1

This is a postscript message. I was interested in the first-hand comments from both joe cool and berelane and appreciate the chance to read them. The future of Chinese stock markets is a mega-issue hotly debated by experts all over the world. All may thrive. All may collapse (weakness in the banking system.) There's no way any retail investor can tell for sure.

Since you mention you're risk-averse, one wonders why you would consider jumping into a high-risk foreign market based only on the fact that this market has recently enjoyed explosive growth? This is not just jumping from the frying pan into the fire, it's straight into the blast furnace.

It's important to build one's capacity for risk slowly. Perhaps you might consider investing a small portion of your funds, say 5-10%, in an Asian or Chinese fund, although personally I find joe cool's suggestion of India to be very sound.

For the rest of your funds, here's a modest savings suggestion with a hint of China: HSBC Direct is an online virtual banking service that's offering a spring promotion, according to an ad I saw in the net a couple of weeks ago. For new savings accounts they will pay interest of 6.25-6.50% until the end of April or May, and after that savings rates will drop to levels that will probably be competitive with ING Direct.

What's the Chinese connection? HSBC is a giant global bank headquartered in London England, but its ancestor was a British bank founded in China more than a century ago and known as the Hong Kong and Shanghai banking corporation.

We'd all like better rewards ! But risk accompanies rewards, and generally an investor learns to manage risk one step at a time. Good luck to you.

Answer 2

I have had some experience ofinvesting directly in China.China is like any other developing country in that investing there is risky but so was investing in Japan in the 50's & 60's.It took along time for the Japanese stockmarket to collapse brought about by themselves.China's local stock markets ie.Shenzhen Shanghai are very volatile but by investing in companies on the UK stockmarket such as HSBC you will avoid local suprises.Or you can invest direct in the Hong Kong market.Alternatively my suggestion would be to invest in China & Far East Trusts investing in China that way,You will have less risk & sleep at nights!By the way I think the Renmimbi( the Chinese currency) will take over from the dollar as the reserve currency of the world in the next 25 years & there will be a Renmimbi block of the Yen & other Far Eastern currencies in it.

Answer 3

First and foremost - congrats on recognizing the need to invest.
Second - a rule of thumb for investments: DON'T - until you have 3 months income tucked into SECURE cd's/money market/ fed bonds.
Third - Overseas investments are giving strong returns at present. Depending on your view of the world economy, that will probably continue.
Fourth - I'd rate China "iffy". They have a great return at present. BUT - their currency is under intense pressure internationally to float. At present it is artificially set against the US. When it is freed, the investments in China will fall dramatically in adjustment. My youngest son has worked in China for the past 5 years. When I write about their growth, he writes back that there is a small middle class w/ explosive growth BUT their infrastructure is miserable, the capitalism awareness abyssmal - allowed by the political structure as long as the political structure is paid properly and allowed to live in peace. Economists tell us that China will match the US economy in the 30's and be the leader by 50's. India will match in the 30ths as well. Given the longer history of democracy and the fact English is at least one of the 10 official languages in India - go India, HOWEVER.
STRONGLY consider a mutual fund which will spread your risk around several nations or sectors. I am blessed to have several American Funds right now and they are returning in the 16% range. You need to be ready to leave the money there for 5 years to amortize the buy-in cost, however.
Check out Moody's - or Yahoo Finance for more information on return/risk factors and so forth.
God's speed.

Answer 4

i would not recommend chinese funds. i am chinese and my relatives in china are comparing the stock market in china currently to before the stock market crash of 2000. most of the stocks there are at outrageously high prices. here's an example (it's true) a new banking institution decided to go public and started selling shares. by the end of the day, the stock was up 38% and they had sold out every single share. some of the major banks in china have aligned and have done things to try to prevent a possible stock market crash. even my grandfather who knows nothing about stocks invested 300,000 yuan in chinese stocks and all the stocks just went up and now he has 500,000. he hasn't lost money from a single stock. in the u.s. in 1929, people frantically bought shares and some even invested their life savings. what then ensued was black tuesday, the famous crash of 1929, and then the great depression. i don't think china will go into depression (lol) but i think their stocks/ funds are inflated.
you don't have to take my advice but i suggest you stay out of chinese funds for a while. you could look into other foreign funds or just stick with american funds. good luck investing.

Answer 5

nicely RUN mutual funds held over 5 YEARS or extra could make large investments. one 365 days or 2 years is in basic terms too short a time to hold Mutual funds. See the BigCharts links under. 2 best examples. 365 days to this factor, you've got been safer and made as stable a return (danger adjusted) via putting the money in a funds industry fund. Ginnie Mae mutual funds might in many cases be considered very risk-free. They well-known a return approximately 5 in keeping with cent. A 365 days in the past became right into a tad extra which made them eye-catching. constancy GINNIE MAE mutual fund that's all bonds: Yields(%) as of 08/28/2007 30-Day Yield: 4.ninety 5 APR cost adjusted overall performance (%) as of 08/29/2007 relatively YTD 2.eighty% This fund has all the markings of a stable investment for an prolonged term conservative investor says Morningstar. Lipper score as of 07/31/2007 a million 365 days #13 out of fifty 9 GNMA 5 365 days #8 out of fifty 4 GNMA 10 365 days #6 out of 30 GNMA ============================ Case #2 undercover agent A mutual fund monitoring the S&P 500 (index fund) Cumulative entire Returns3 (%) as of 07/31/2007 S&P 500 Comp YTD 3.sixty two 3.sixty 4 a million Month -3.09 -3.10 3 Month -a million.39 -a million.39 6 Month 2.07 2.10 ------------------------------- yet another S&P 500 fund: rapid Stats YTD return (08/29/2007) 4.40 two% NAV (08/29/2007) one hundred and one.seventy six 12 Month Low-severe $87.seventy six-$107.seventy two look on the version of the cost in that factor physique. it relatively is in basic terms too risky for one 365 days. long term? i admire a number of those examples and am invested in them. short term of in basic terms a 365 days or so? you've got crushed or matched that with a stable funds industry fund too. you've got slept extra appropriate too. See the charts on the links under.

Answer 6

Yes. I own some shares of a Chinese Index Fund -type of fund that replicates the stocks that compose the index of any given stock market- (also known as ETF), and I've had an annualized return of 21%. It's called iShares: Hong Kong, and the symbol is EWH. It's managed by British Barclay's Bank.

Answer 7

With a small portion of your portfolio like 5% investment in China makes a lot of sense. They have grown very fast and will likely continue to grow much faster than the U.S. for the foreseeable future. I would consider USCOX, FXI, PGJ, and CAF.