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For Triple-Digit Profits, Sell China Now – And Plan to Buy Again...By
Tuesday, July 21, 2015
True Wealth Systems readers could have turned $10,000 into more than $80,000 by following my biotech advice since 2012.
That's a more than 700% gain... and it was possible by owning a simple biotech fund.
Last month, I explained how we made those incredible gains. The most important thing was our mindset...
We were willing to sell... And we were willing to get back in.
That's the key to huge gains when a bull market gets going. And it's how hundreds of percent MORE gains could come in Chinese stocks. But importantly, now is NOT the time to own Chinese stocks.
Let me explain...
"Gee, Steve sure is spending a lot of time talking about China," you might be thinking.
You're right. I've written a lot about China lately. But if you've invested in China, you need to understand that it's a volatile market. And you have to be willing to sell when Chinese stocks move against you.
That's what has happened in recent weeks. And it's why we sold the Chinese stock investments in my True Wealth newsletter over the past month.
Subscribers who bought on our initial recommendation made a big gain... They sold half of one recommendation once we were up 100%, and they sold the other half for a gain of 63%.
If you owned China, but haven't sold yet, I suggest you do so now. But that doesn't mean I'm giving up on China for good...
I do intend to get back into China at some point.
You see, there are several ways to hold Chinese stocks. One way is by buying the largest Chinese companies that actually trade in Hong Kong... called H-shares.
The Hang Seng China Enterprises Index tracks China's H-shares. And it is now one of the world's cheapest stock indexes. Take a look:
I look forward to owning Chinese stocks at these low prices again. But not until the current downtrend turns into a new uptrend. Meanwhile, $400 billion is still set to flow into local Chinese stocks (according to MSCI, the leading global stock index provider). This will provide a tailwind to the markets over the next few years.
So the opportunity is there in China... We just can't get back in yet. We can't know how far China will fall, so we must move along for now.
I will let you know when the coast is clear and when the uptrend is officially in place. I don't mind giving up the first few percentage points to make sure the uptrend is back.
This strategy of getting out and getting back in could have turned $10,000 into more than $80,000 in the biotech sector for True Wealth Systems readers. And we could see a similar situation in Chinese stocks over the coming years.
I don't know if we can match the big gains we've made in biotech in three years, but we definitely have triple-digit upside in China when the time is right.
Good investing,
Steve
Further Reading:
While it's not time to own Chinese stocks right now, Steve says it's a fantastic moment to buy another asset – real estate. It's where he's putting his money right now. And he says you should, too. Get all the details here.
If real estate is one of Steve's top ideas right now, why is he sharing it? Because it's in our best interest to share our best ideas with you. Steve says this principle has turned into "far more dollars for us in the long run than if we'd simply kept our best ideas for ourselves." Learn more right here.
Market NotesTHE HOUSING BOOM MARCHES ON Today's chart offers the latest proof that the housing boom is alive and well...
Longtime readers are familiar with the housing-related plays we look at to gauge the sector's success... These include Mohawk Industries (flooring), Lowe's and Home Depot (home improvement), and Sherwin-Williams (paint).
Another indicator we use is the price performance of cabinet-maker American Woodmark (AMWD). American Woodmark is a leading manufacturer of kitchen and bath cabinets... and its share price can tell us a lot about the state of the housing market.
As you can see from the chart below, shares of AMWD have been soaring. The stock recently struck a new all-time high... and shares are locked in a massive long-term uptrend, rocketing more than 225% over the past three years. It's more proof that the housing boom is in full effect.
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