Now May Be The Best Time To Invest In China

The current COVID-19 pandemic that has halted world economic activity began back in December of 2019 in the country of China. For weeks the world watched as the Chinese government dealt with the viral outbreak. Some called the Chinese government's decision to 'lock-down' the city of Wuhan in the Hubei province and other major cities that were experiencing growing COVID-19 case rates as 'draconian.'

The spread of the virus slowed in China due to the 'extreme' measures they took, but pandora's box had been opened, and the virus had spread throughout the world. At this time, most of China is back to normal in terms of businesses being open, workers returning to factories, and most of the country no longer being in a lock-down situation. However, the lock-downs in China started on January 23rd, and Wuhan, for example, is still under strict movement rules.

In comparison, most European countries, the U.S., and other developed nations just went into 'restricted movement orders' in the last week of March. So, in those terms, China is two months ahead of the rest of the world in terms of fighting this disease and slowing economic activity as a form of fighting the spread of the disease. That also means they are likely two months ahead of the world in terms of when it comes to 'getting back to normal' or getting the economy back up and running.

So, since China is 'ahead' of everyone else, we could induce that some Chinese companies, mainly those who serve the Chinese people, will start to perform better financially, sooner than other companies around the world. This leads to the potential investment opportunity that is currently presenting itself in China, while the rest of the world is in a holding pattern waiting for the second shoe to fall before, they put more money to work in the markets.

So, let's take a look at a few ETFs that you can invest in today, which will give you exposure to the Chinese economy, and potentially a Continue reading "Now May Be The Best Time To Invest In China"

Coronavirus - ETFs You Should Avoid

With the deadly Coronavirus outbreak continuing to spread and countless US companies let alone Chinese firms suspend business in China, even though the true extent of that effect is yet to be known, it’s clear there is going to be some economic effect from this disease.

Like it or not, we all live in a world that is becoming increasingly more interconnected and interdependent. This is the same reason a disease like Coronavirus is so quick to spread around the world and why the impact on stocks is not going to be limited to those firms based solely in China.

This makes it even more difficult for investors to truly determine what is safe and what isn’t in the stock market right now. However, we do have some low hanging fruit in terms of what you should not own at this time.

The first Exchange Traded Funds you should be avoiding right now are going to be the pure-play Chinese equity ETFs. The iShares MSCI China ETF (MCHI) or the SPDR S&P China ETF (GXC) should be on your sell list or high on the list of what not to buy. These funds invest in Chinese equities and don’t favor one sector more than others. The longer the ‘quarantine’ periods last in the different provinces in China, the more these ETFs are going to be hurt, end of story. However, these could be two outstanding options if you are looking to buy back into the Chinese markets once the Coronavirus scare dies off.

Furthermore, ETFs such as the Continue reading "Coronavirus - ETFs You Should Avoid"