Jason Hsu, Chief Investment Officer of Rayliant Global Advisors, encourages investors to lean into Chinese stocks despite economic volatility. Hsu views the current low prices of these stocks as an opportunity for future profits and urges investors not to be deterred by short-term risks.
“The potential for high returns in the Chinese stock market should not be overlooked,” Hsu says. He believes in the importance of a diversified portfolio and advises investors to take note of overall market conditions rather than focusing solely on individual stocks. Furthermore, he echoes the sentiment that patience and persistence are key factors to success in investment.
Hsu emphasizes the need for strategic investment amidst volatile market conditions, asserting that the current prices of Chinese stocks represent a prime opportunity for substantial profit. He advocates for taking advantage of such opportunities before they evaporate, as opposed to waiting for uncertainties to dissipate.
In his view, the Chinese market conditions are likely to improve and offer prospects for future growth. He suggests that overcoming initial adversity could lead to great rewards in the face of forthcoming economic changes.
Despite recent economic setbacks, there are signs of positive transition in China’s market. Improved consumer prices, three consecutive months of factory activity growth, global market recovery, and advancements in pandemic control contribute to an optimistic outlook. The tech sector has also begun to attract new investments, indicating positive industrial development.
“Despite initial hurdles, the Chinese market has significant room for impressive growth,” Hsu asserts. In relation to the Shanghai Composite Index’s recent recovery from a five-year low, Hsu suggests investors consider allocating 7-8% of their portfolios to Chinese shares, alongside 60% to U.S stocks, 20% to developed markets like Japan, and 12% to other emerging markets.
Within China, Hsu particularly encourages investment in the state-owned food and beverage company, Kweichow Moutai. He cites its “brand premium” and potential for robust returns from China’s increasingly affluent middle class and its growing appetite for premium spirits. Thus, alongside the trend of state endorsement for state-owned enterprises, it makes for a compelling investment in the short term for those interested in the flourishing Chinese market.
