If you don’t pay attention to foreign markets, you might not know that emerging markets are not doing as well as the United States.
For starters, there is a growing concern that the economic crisis in Turkey could be the beginning of a contagion. The price of oil is also down, and that has people scared that the world economy might be slowing down.
Lastly, there is this looming trade war with China that has caused the Hang Sang Index to fall over 20% this year. As a result. Chinese tech stocks have been getting crushed…
Alibaba (BABA): The largest e-commerce company in China is down 24% from its 52-week high.
JD.com (JD): The second largest e-commerce company in China is down 33% from its 52-week high.
Tencent (TCEHY): The largest gaming company in the world reported earnings that disappointed due to a lower revenue number. One of the reasons the revenue number is lower is that the Chinese government made Tencent pull one of its popular games due to its graphic violence. Tencent is down 48% from its all-time high.
NetEase (NTES): NetEase is a huge gaming company in China, and one of the best-performing stocks over the last five years. It’s down 34% from its all-time high.
Baozun (BZUN): The “Shopify of China” is down 37%.
iQiyi (IQ): The “Netflix of China”, and newly traded company, is down 74% from its high.
China comes with its own set of challenges. It’s still a communist country; the government can dictate what a company can and cannot do. So if you decide to invest in China, know that there is considerable political risk.
However, the tailwinds are enormous.
China is the most populous country in the world, with the largest emerging middle class in history. I expect each of the businesses I listed to flourish!
I feel having at least one of these companies in your portfolio is a good idea, if you don’t already.
Disclaimer/Disclosure Statement: Information in this article is not intended to be a recommendation to invest in any stock. Rather, it is presented for readers’ education and consideration when making their own investment decisions. The author is long iQiyi.