Most investors have been afraid of putting their money to work overseas, particularly in the Chinese stock market. While there are many reasons to be careful when investing in other countries, some of these reasons often place sentiment into an overly conservative corner, and that often leads to several missed opportunities.
The biggest bull case for Chinese stocks is the fact that most of them, especially in the technology sector, offer much better risk-to-reward profiles compared to their American counterparts. In terms of current valuations versus current (and future) earnings growth, the scale significantly favors Chinese companies. That being said, the fact that markets haven’t priced this in could mean fear and emotion are driving those stocks instead, a massive opportunity for savvy buyers.
