Thoughts on dumping China Funds
Discussion
So its been a tough couple years to be in China.
I am sitting on some serious losses on my ISA that only recently has been compensated handsomely in the boom with US stocks of late.
I am now very close to breaking even with no losses overall.
I am tempted to sell everything and sit on the sidelines with cash and buy back into a tracker fund next year when there is opportunity to do so.
OR
Is it worth sitting on China? Surely a recovery is on the way once the Chinese economy rebounds?
But I just cant see it. The way the CCP are managing economic policy and the slow train wreck of the property bubble doesnt give me hope.
Am I missing something?
I am sitting on some serious losses on my ISA that only recently has been compensated handsomely in the boom with US stocks of late.
I am now very close to breaking even with no losses overall.
I am tempted to sell everything and sit on the sidelines with cash and buy back into a tracker fund next year when there is opportunity to do so.
OR
Is it worth sitting on China? Surely a recovery is on the way once the Chinese economy rebounds?
But I just cant see it. The way the CCP are managing economic policy and the slow train wreck of the property bubble doesnt give me hope.
Am I missing something?
Why would you keep the China funds?
If you had the cash would you buy China funds or are you anchored to the price you paid for them and living in hope that they'll come good again one day?
If you had the cash why wouldn't you buy a global tracker on Tuesday or at least average the money in rather than trying to sit on cash and then attempt to time the market "when there is opportunity to do so"?
Market timing is incredibly difficult to impossible depending who you listen to and trust
If you had the cash would you buy China funds or are you anchored to the price you paid for them and living in hope that they'll come good again one day?
If you had the cash why wouldn't you buy a global tracker on Tuesday or at least average the money in rather than trying to sit on cash and then attempt to time the market "when there is opportunity to do so"?
Market timing is incredibly difficult to impossible depending who you listen to and trust
Yes indeed. I am thinking they will come good one day. But therein is the problem. What is the opportunity cost for not putting into a tracker or similiar instead?
If I sell the China only funds and put them in trackers and the US stock market does dip in 2024 I will be sitting on more losses. I expect US interest rates to be higher then market expects I would then buy in again into trackers. What we have experience lately in the US is a reaction based on interest rates coming down next year significantly.
There is something psychological in cashing in everything and having a very small loss and drip feed into trackers in 2024 into 2025 i.e. world, tech, US.
Everything I read about China, every decision they seem to make suggests things wont turn around.
If I sell the China only funds and put them in trackers and the US stock market does dip in 2024 I will be sitting on more losses. I expect US interest rates to be higher then market expects I would then buy in again into trackers. What we have experience lately in the US is a reaction based on interest rates coming down next year significantly.
There is something psychological in cashing in everything and having a very small loss and drip feed into trackers in 2024 into 2025 i.e. world, tech, US.
Everything I read about China, every decision they seem to make suggests things wont turn around.
Edited by Abacus21 on Sunday 31st December 10:05
What do you think you know about China?
I know absolutely nothing about China but I do know you could wake up tomorrow and find the Government has near as dammit closed down the ability of an entire sector of the economy to do business freely.
Respectfully are you sure you're not just crossing your fingers and guessing or hoping?
For most people the smart thing to do is just to average into a suitable low cost multi-asset fund that meets your appetite for risk and stick with it through thick in thin.
It's boring but historically it works and you shouldn't find yourself doubting your decisions too much
I know absolutely nothing about China but I do know you could wake up tomorrow and find the Government has near as dammit closed down the ability of an entire sector of the economy to do business freely.
Respectfully are you sure you're not just crossing your fingers and guessing or hoping?
For most people the smart thing to do is just to average into a suitable low cost multi-asset fund that meets your appetite for risk and stick with it through thick in thin.
It's boring but historically it works and you shouldn't find yourself doubting your decisions too much
b
hstewie said:
hstewie said: or at least average the money in rather than trying to sit on cash and then attempt to time the market
You're just as likely to lose out as to benefit from doing it, so what's the point? And the market could still collapse ten minutes after the last payment has been averaged in.IMO if you're going to buy risk investments, i.e. stocks/shares/equity funds, you might as well just get on with it.
I would not want to be in cash in 2024 for any long period unless of course there is a massive wobble.
There has never been a recession since 29 in an election year in the US.
We are right at ATHs from 2 years ago.
The market has gone nowhere in 2 years. Thats not unheard of but we are due a run.
Will it be 2024. Anyones guess. The market will be manipulated I am sure, but in the long run the market will always return to mean and we are sitting right at a point where we could go double digits % from.
Or of course it might all tank and a massive recession comes in 6 months in which case you are a genius.
There has never been a recession since 29 in an election year in the US.
We are right at ATHs from 2 years ago.
The market has gone nowhere in 2 years. Thats not unheard of but we are due a run.
Will it be 2024. Anyones guess. The market will be manipulated I am sure, but in the long run the market will always return to mean and we are sitting right at a point where we could go double digits % from.
Or of course it might all tank and a massive recession comes in 6 months in which case you are a genius.
OP, if you're now considering swapping equities for cash, then perhaps being overexposed to China doesn't fit with your personal attitude to risk?
Out of curiosity, what percentage of your initial ISA investment did China represent? Also, how many different China funds did you choose, and how have they subsequently performed against the sector average?
Out of curiosity, what percentage of your initial ISA investment did China represent? Also, how many different China funds did you choose, and how have they subsequently performed against the sector average?
I am also thinking of offloading some units from this etf which is 29% china. I have to keep reminding myself it's a longgg term bet (25 ish years) so almost anything can happen but also mindful of the demographic situation, however there is also a good chunk in India which looks better. However I don't know how relevant the specific details of a country are in the globalised world? If a Chinese company dominates the EV market in 20 years time, how relevant is it to my etf if the Chinese economy is buggered?
https://www.justetf.com/uk/etf-profile.html?isin=I...
https://www.justetf.com/uk/etf-profile.html?isin=I...
Report in Financial Times this week - 2021 was the highest year ever for foreign investment in China. As of December 2023 90% had left.
The property market accounts for 20-30% of the economy. The country has a population of around 1 billion, it already has sufficient housing for 2 billion. The property sector has sold a further 40m properties off plan, people are paying mortgages for promises. All the major property companies appear to be bankrupt.
Have a look at the Joe Blogs channel on Youtube.
The property market accounts for 20-30% of the economy. The country has a population of around 1 billion, it already has sufficient housing for 2 billion. The property sector has sold a further 40m properties off plan, people are paying mortgages for promises. All the major property companies appear to be bankrupt.
Have a look at the Joe Blogs channel on Youtube.
I've had this fund in my SIPP for exactly 3 years since when I bought into it at 660 skilfully predicting China would rise. It did, then dropped again. Braved out the biggest dip but the realised I'm too old for the ups and downs so bailed a few days ago at 424 (put the dosh into world tracker) and then the fund rose again to 441. YMMV - good luck!
When things are on the up it takes a lot of willpower to sell and extract profits but when things are down its easy to panic sell and crystallise losses.
When things are on the up it takes a lot of willpower to sell and extract profits but when things are down its easy to panic sell and crystallise losses.
gotoPzero said:
We are right at ATHs from 2 years ago.
The market has gone nowhere in 2 years. Thats not unheard of but we are due a run.
Will it be 2024. Anyones guess. The market will be manipulated I am sure, but in the long run the market will always return to mean and we are sitting right at a point where we could go double digits % from.
Are you saying current levels are where they were 2 years ago with nothing but dip in-between?The market has gone nowhere in 2 years. Thats not unheard of but we are due a run.
Will it be 2024. Anyones guess. The market will be manipulated I am sure, but in the long run the market will always return to mean and we are sitting right at a point where we could go double digits % from.
And what does that last sentence mean? "From" what? Where we are now? If so what's the driver for a double digit % rise, and over what timeframe? You think during 2024, and China specifically?
Whenever you buy anything it should be done with some form of expectation and timeline.
I hope I'm going to make a killing, is not a realistic expectation
Risk return are the criteria to use. So a diversified investor may currently be looking at increasing his exposure from maybe 2 to 5%. Not an outrageous bet considering AI
Selling is so much more difficult than buying, walking away from a buy is easy. Selling has an emotional component (did I ef up). Best way is to ask "would I buy this today?" and look at the risk and return. now.
In retrospect you should have either sold when it reached your expectation, or sold at a loss when it didn't and used the loss to offset a gain elsewhere and save a little tax.
When I xxxk up, I tell myself that I it's the contrarian part of my holdings It helps. But....you should not sit on a NPA for an extended period if it is going to damage your total returns.
So....diversify and use risk return, hope that helps.
I hope I'm going to make a killing, is not a realistic expectation
Risk return are the criteria to use. So a diversified investor may currently be looking at increasing his exposure from maybe 2 to 5%. Not an outrageous bet considering AI
Selling is so much more difficult than buying, walking away from a buy is easy. Selling has an emotional component (did I ef up). Best way is to ask "would I buy this today?" and look at the risk and return. now.
In retrospect you should have either sold when it reached your expectation, or sold at a loss when it didn't and used the loss to offset a gain elsewhere and save a little tax.
When I xxxk up, I tell myself that I it's the contrarian part of my holdings
It helps. But....you should not sit on a NPA for an extended period if it is going to damage your total returns.So....diversify and use risk return, hope that helps.
Gassing Station | Finance | Top of Page | What's New | My Stuff