I'm confused. It seems to me lately that China is so inter-connected with the U.S. that the market movements are very similar. Is that because China owns so much of the U.S. and/or so many U.S. Corporations have so much interest in China now?
Though you may believe that China is still a good long-term buy, how do you believe Matthews Funds like MAPIX will do in the shorter 3-5 year term?
I've learned so much from all of you at this Forum over the last year.....just enough to understand how much I DON'T know.
Cathy
Comments
You're seeing this in other emerging markets, as well. I think my fear is that that inflation that we've exported swings back in this direction.
I see a great deal of potential in Asia, especially over the longer term and that's where I want to be. However, nothing's foolproof - I think these countries have potential and the building blocks to be a substantial force over the next decade. China's attempts to go "shopping" previously included massive natural resource buys, but I think their attempts to buy up tons of European debt will either result in disaster or maybe they'll just wind up owning large portions of Greece and its neighbors. It goes to show the interconnected nature of things though; there are some serious issues in Greece, and they keep getting bailed out because if they default, some bank somewhere else in Europe goes under. If the Euro takes a huge tumble, China holds a lot of Euros. If Greece goes, so goes Spain and Portugal (most likely.)
It's really a worldwide attempt to keep throwing good money after bad, but whether it's Greece or our own debt issues, the inevitability cannot be avoided - bailing out Greece again and again will just play out like a really unpleasant global version of "Groundhog Day", but there is a point where the can cannot keep getting kicked down the road. There was an excellent (and really kind of powerful) interview with Jim Sinclair on King World News yesterday and whatever one thinks about the gold discussion, I agree with his statement about the debt and economy issues we and Europe are facing - "You don't need one more thing to happen, you don't need any more problems, you don't need anymore degrees of problems. This problem is here, this problem is now, it's not tomorrow - it's right as we're talking. 'This is it' was a long time ago. There is no plan to repair, there's only a plan to kick the can down the road." (http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/6/16_Jim_Sinclair.html)
Whether or not China can figure some way to take advantage, who knows. Maybe not. Either way, it's very, very clear that there are no plans to solve any of these problems aside from printing more money.
Whether due to external or internal forces, China and other EM's can certainly run into problems. If there is another 2008, countries with better balance sheets may fare better, but no one's getting out of that unscathed. I wouldn't own a China-centric fund, and while I do think China has significant potential, I also quite like Singapore, Malaysia and other Asian-region nations.
I still hold an assortment of smaller positions in Matthews funds, Pimco EM Multi-Asset and larger positions in Jardine Matheson and Jardine subsidiary Dairy Farm International. I do have less overall EM exposure than I did a year or two ago, but have no plans to decrease from the current level. I don't hold any EM bond funds at this point and really don't have any fixed income funds at this point.
Cathy
I still have substantial bond holdings, but nothing too speculative, and mostly with long-term winners such as Gross, TCW (now run by the MetWest team), and Gundlach/Padilla at DoubleLine.
Hope this helps a little ... FWIW -- AJ
As I wrote and shared elsewhere, I've become convinced that our current funk is here to stay for many years. We are the victims of the greedy monsters who caused the Crash in '08-'09. In terms of investment returns, I believe we have less and less to look forward to, but to make the best of it, I would stick with Matthews....Although once we get the next (dead cat) bounce, I'll take quite a bit and put it into MWHYX, to complement my PREMX holdings--- currently just 6.42% of total. Add that to the amount invested in a specific bond at 5.74% of my holdings, and at the moment, only a bit over 12% of my portfolio is in bonds. Much too low, and I'm finally facing it. I ought to be taking advantage of the monthly dividends I should be getting, and re-investing that money.