If China gets hit hard over the lending "bubble" -- or something else -- and other emerging markets go with it, which they would, something like 30% in that space would cause the entire portfolio to drop a lot more than the broad market and a lot more than what might be tolerable, resulting in a sell-off at exactly the wrong time. Having a lot of anything is great while it's working, but it also sets the stage for panic selling at the low when it isn't. That mistake is avoided by moderate exposure. Putting 5% of a portfolio in China at the worst possible time wouldn't be ruinous but 30% might be.
The Right and Wrong Way to Play China
Check Out Our Best Services for Investors
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.