China’s Not Center Of Investing Universe

September 08, 2015

As an aside, it was interesting to see that the only mention of Norway or Denmark was an article devoted to the “bubble” brewing in the Scandinavian countries. So from this table, we can conclude that all anyone wants to know about is China. And in a strange way, it makes sense.

Most pundits have concluded that the single driver of markets is what’s happening with the Chinese economy and market. If they can just figure out China, everything else will fall into place. After all, China has the second-largest largest economy in the world.

The fact that China’s onshore market has had a spectacular up move, and then a big down move has only reinforced this message. So the microscope is fixed steadfastly on China.

We believe China may yet hold the answer to many economic puzzles, and may even be a good long-term investment opportunity, but it’s not the only country that matters.

In strong risk-off markets, most markets are expected to be down. However, the degree to which they are down can vary dramatically. The best-performing country in the MSCI All Country World Index last month was up 0.1 percent. The worst-performing country market was down 34.5 percent.

And just to be clear, we’re not saying China didn’t start this whole correction. It’s quite possible the whole downside move started with action out of China. What we are saying is that a study of what’s going to happen in China—and by extension in the Chinese market—is too myopic in the current environment.

If these statistics on total references are indicative of the attention of the investing world, there are lots of places in the world to invest where no one is looking.

Focus on countries that are cheaper, have better fundamentals and stronger relative momentum. A focus on those underappreciated, under-loved countries should be rewarded in the long run.


Accuvest Global Advisors (AGA) is a registered investment advisor based in the San Francisco Bay Area. Founded in 2005, AGA has drawn considerable recognition in the industry for its work in building global strategies through the use of single-country ETFs. For more thought leadership and firm updates, visit www.accuvestblog.com, www.twitter.com/Accuvest or email [email protected]. For a list of full disclosures, please click here.

 

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