The way that I view this is threefold. First, exchange-traded enthusiasts should acknowledge the yuan's stable, slow rise against the U.S. dollar. (See the WisdomTree Chinese Yuan Fund in
3 ETFs For Hedging Against A Falling Dollar
Second, the world's second-largest economy has been recovering from its soft landing; recent manufacturing activity in China hit a six-month high. p/Third, China's stocks represent a far better value with an average P/E near 10 compared to the
P/E near 18.5.
Sure, it is not always easy going with a foreign stock fund. The last three years have been particularly unkind to those who have diversified abroad. Yet chasing the "fairly valued" or "overvalued" U.S. market with additional cash that you may have on the sidelines is not likely to be as beneficial going forward.
The world's second-largest economy offers opportunity that should not be ignored. Indeed, even the pattern of "higher lows" since the late June bottom is desirable for investors who are fond of technical trends.
Courtesy of StockCharts.com
This article was written by an independent contributor, separate from TheStreet's regular news coverage.