Is This Party Time Again?

The share prices in worldwide stock market went up in the past 2 weeks. As an investor, I should be very happy with the capital under my management fully invested in US and HK markets. However, it’s China again. Although we only allocate a small portion of our capital to invest in the China A shares, we had only invested even much smaller portion before October.

Have we missed the party? Many people may regret for not plunging into the market earlier, or at least feel itchy to get into it now. I don’t think so. The Chinese economy is still in serious uncertainty at best, considering the huge property bubble and lacking of purchasing power in ordinary Chinese people. The fundamentals have not changed over the so called National Day. The bubble popped up by the inflation and speculation on the RMB exchange rate will bust at any time. However, it seems that the governments around world are all determined to print more money and a worldwide inflation is almost inevitable, especially if the Chinese government keeps the interest at such low level. Investing in natural resources should be a good idea under such circumstance, as many investors have been doing. I personally don’t like the idea because the commodity prices are largely decided by the world economy, while the economy is very hard to predict. Investing in good business is always a good idea, no matter in good or bad economy. A good business can not only survive a recession, but also grow stronger in a recovery.

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