From the blog

Don’t Let Asian Market Turmoil Scare You

TFP will help you understand and profit from it.

 Even the most successful and savvy investors can be rattled awakening to the seismic shifts that increasingly occur overnight in Asian markets.  It’s big news the media likes using to greet the day with ratings fire and everyone’s question is simply what does it mean?

Here’s what you need to know.

Big shifts, and even big losses in the Chinese stock market are hard to ignore and sound significant, but their market doesn’t function like Western markets.  Equities sold in China don’t allow shareholders to control companies.  Prices of stocks and equities aren’t related to the underlying value of the companies.  Additionally, market capitalization has little bearing on the value of these companies and compared to sheer size of China’s economy, the percentage of wealth in their markets is actually quite small.

What’s more, it may be big news but it’s hardly new news, the United States and Europe have already reduced the amount of imports response to the global recessions triggered in 2008.  China, after such extraordinary expansion, was already reaching the limits of what their economic model could sustain, and instituted a variety of subsidies and programmes to fuel continued growth in the GDP.

Yet while this effort to sustain growth and mitigate decline was possible because of their deep financial reserves, those efforts could only do so much and last so long.

China’s economy has been slowing for some time, although official growth statistics peg 2015 4Q at 6.9%, If anything, China’s economic shift reflects an ongoing progression to what is the new normal and investors need to understand that China, clearly one of the world largest – if not the largest and most important exporter – while not unstable, isn’t immune to risks, and ups and downs as we all are.

China’s stock market is not a function or an indicator or a predictor of the economy.

Let TFP help you take advantage of the changes and opportunities of global economic shifts that aren’t to be feared – they’re simply the new realities of the international markets and if understood, opportunities for investors to confidently – and shrewdly – build wealth today and tomorrow. 

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