Abaci's Common Sense Investing

If you agree to what I wrote last time, then it's never too late to accumulate more China positions, for there should be many more good years ahead. This is a time which I think buying the marco concept will probably do just as well, if not better, as performing elaborate micro analysis. Bear in mind the H-share index has risen by 139% (excluding dividends) since 2006 up to today! Don't expect this kind of performance will repeat itself but equally don't underestimate the potential of China, nor the craziness of the market at times.

So unless you are a stock picking fanatic or have extreme confidence in your (proven) ability, think seriously about allocating part of your portfolio in a H-share index fund, or futures if you really know what you are doing. For red chips since there's no ETF readily available, pick a few that you like like China Mobile, CNOOC, or COSCO Pacific, and you are set. Just sit and wait for lady luck to pay you a visit. If you have itchy fingers that's hard to stand, try your luck on other sectors like blue chips or small caps, or do whatever you want that works, just don't get them burnt!

As for timing, I can't tell you but I do know right now some shares are extremely expensive but some are still reasonable. That's why on average I think buying an index should be relatively safe, for the downside may at most be 30%. I'd buy in stages, like I always do, it's best if it turns out I buy on the way down, but I'd be pleased too if I end up buying on the way up, since the alternative would be not holding a position in a rising market, which sucks even more!