Sep 05

A lost decade for Chinese stocks

By MultiplyWealth's Team

As Chinese President Hu Jintao and Premier Wen Jiabao prepare to hand over leadership to a new generation in the fall, the economic news on the mainland continues to be worrisome.

Beijing has already cut its 2012 economic growth forecast to 7.5% from 8.0%--that’s the slowest pace in 13 years. China exports are getting crushed by the economic troubles in the eurozone, where GDP shrank by 0.2% in the second quarter and isn’t expected to rebound until 2013, according to a survey of economists by Reuters. Chinese industrial profits fell 5.4% year-on-year in July, the fourth straight month of declines.

Any wonder all the bad news has weighed heavily on stocks? Bespoke Investment Group just posted a remarkable chart that shows that the Shanghai Composite Index is now trading at levels not seen since mid-2001. Chinese stocks are off 66% from the historic high set back in October 2007:

блог 12.09.05.png

 

If you want to talk about how potential market events or the fiscal cliff might affect your equity portfolio, and perhaps talk about whether some of our defensive-minded investment strategies might be right for you, write Multiplywealth at notice@multiplywealth.org It’s your own account; you can see the balance change on a daily basis, make investment changes extremely quickly, and add to or pull your money at your complete discretion.

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