Joe Blogs explains his POV of China’s current macro economics. At a 12th grade level.
I’ve divested my Chinese stocks due to geopolitical tensions, and deteriorating Chinese economics.
I currently have only EVs (TSLA, BYDDF, XPEV positions) with Chinese exposure…
While others lament the US “handling” of world events, I personally see the US doing things that strengthen the US position. Some of these moves have been needed for at least a decade - IMO.
I, a US citizen, am in the US, I depend on a strong US economy. I applaud these moves.
As I watched this, I was struck by the macro vs MICROeconomic goals.
I personally benefit from lower prices, at my MICROeconomic level. You know “buy the dip” advice.
But from a macro POV, deflation is “bad” for the larger society.
My older brother (and I am rather old myself)wants to shift from his long time active investing in stocks, mostly tech he helped to invent and understood in depth, to the construction of bond ladders.
We have been talking timing and tactics and I am still telling him “Soon, but not yet.”
I am watching every word Wendy writes and this and other related threads with great interest.
I wonder. 30 years ago Japan was the Asian economy everyone was worried about. The Nikkei crashed in 1990-1991 and this was the start of Japan’s long-time economic stagnation. Take a look at how US stocks responded:
I’ve had really bad results the couple of times I’ve sunk money into Chinese companies ( they were TMF recs,too ), so I don’t care if I miss every " the next big thing" from China, won’t be putting any money into them.
VTV had a decent 2021. Massively over-performed in 2022 (by losing almost nothing, compared to VOO and QQQ). But are lagging a lot so far in 2023. I am very curious as to why you think value will come back. I have an inkling it will, but no real “reason” for my belief.
(kicking myself for not rotating to value in 2022 even though I considered doing so often!)
EDIT: Maybe I found my own answer? Investment and Market Insights | T. Rowe Price…-,higher%20interest%20rates%20and%20the%20maturing%20of%20the%20recent%20period,better%20environment%20for%20value%20stocks.
Depending on the company a value stock is more tied into the actual production in our country. That is going to have a very long fantastic future in many cases.
For all of our many problems, the USA is still the best place to invest. I don’t need to try to swing for the fences by investing overseas. I’ll take consistent growth instead.
Btresist what you are not showing is how much the bonds actually went up. While the interest rates go down holding bonds that pay more interest rates cause them to increase. I know you understand this but some people might not.
The CFA program discussed US equity portfolios doing the best and global and international portfolios doing slightly less well.
The reason to go to a global or international portfolio is to spread the risks more. It is not necessary. The real reason it might be done by Wall Street is to appeal to different clienteles.
