- Proper due diligence is needed to separate low risk from high risk investments.
- The fact is, nobody does their research anymore as ETFs and index funds have taken over the investment world.
- I’ll describe a few Chinese investments that look amazing at first but can easily lead to a total loss.
Yesterday we talked about how emerging markets are generally becoming attractive. Today we’ll discuss a few Chinese stocks that show some of the risks lying in such a market.
As I see the S&P 500 climb to new highs, I understand that risk isn’t what investors think about, but my experience that spans a few market cycles keeps me focused on the risks while investing.
By risk I don’t mean short term volatility coming from market sentiment. The S&P 500 hasn’t been volatile at all in the last 8 years as it has just gone up, but for every point that it goes up while corporate earnings remain flat, the risk investors are taking gets higher. More →