The sovereign crisis in Europe has shaken the confidence of investors across the globe. Ironically, rumors surfaced that Chinese government could come to rescue by buying some Italian bonds. Brazilian government also raised the voice that BRIC countries plus South Africa might come up with a joint plan to extend helping hands to Europe. Are the emerging countries going to emerge as the white knight? If that is the possibility, then classical assets allocation should put emerging mkt (for both equity and fixed income) into less risky category than the developed.

You heard it " Buy & Hold doesn't work anymore". It is not only because S&P 500 has lost a decade. The WSJ following the 400 plus points tumble of DJ industrial index on August 19 shows some clue why "Buy and Hold" is not going to work anymore.

 

Among Percentage Gainers on August 18th 2011:

VS 2x VIX short Term ETF       40.79%

iPath SP 500 VIX Sht Tm         20.70%

ProShare Ultra Russell 2000    17.

Starting on March 25, Fei A. Shang has been invited by China Journal to write series of investment education / market view articles, to be published on weekly basis. Please read the first article of this series via the link  “斐然”系列投资讲座- 最近市场怎么样？http://www.chinajournalus.com/news-info.aspx?nid=4618

 

We are moving to a brand new office site on May 1st, 2011. The new office address is

500 Lake Cook Road, Suite 350, Deerfield, IL 60015.  Right off highway 294, it is conveniently located steps away from the Deerfield Metra station. We think the new office will better serve clients.

Among all economists and portfolio managers giving an outlook for 2011, nobody could have predicted the turmoil in Middle East and the devastating earth quake /tsunami/nuclear radiation leak in Japan.  However, the global markets did get shaken by the political unrest, energy supply disruption and possible impact on global economy by a huge setback of Japan's economy. Before jumping into a bearish view on the market for the following weeks or months, investors probably need to pay attention to the volatility level of the markets.

Higher then normal inflation in emerging countries as well as broad Asia Pacific area is the fact. However, if the inflation is pumped up in the U.S. due to the geopolitical chaos, it is arriving much earlier than consumers and the Fed have expected. It is not welcomed either, particularly at the current stage of economy. We are more sensitive to the energy prices, while agriculture products prices have more impact on people in Asia. Any pull back of the market due to concern on ealier than expected arrival of inflation could creat great entry point for commodity holdings if you don't already have in your portfolio.

There is no shortage of inflation talks in the headlines. The most recent data show that inflation in China has reached 5%. Although official inflation level is still quite low in the U.S., rising food and fule costs are already having an impact on consumers and business in the U.S. Surely, there is enough reason to be concerned about the inflationary risk in both countries. Inflation is still needed in the U.S. at the current stage of economic recovery. Although dramatic monetary policies and special administrative measures in China are targeted to contain inflation, particularly the headline inflation, I don't think the momentum of rising raw material costs is going to recede significantly.

We are very excited to add the blog feature to the website as an interactive communication channel with people interested in Amy's view. See you at the blog in a bullish 2011!