Jeff Salway wrote an interesting article in Friday’s edition of The Scotsman where he highlights the current volatility of the Chinese stock market.
He points out that many UK pension savers will be exposed to China through funds and other products in which they currently invest.
In the article, Richard Wadsworth, financial planner at Carbon Financial Partners, suggests this is not the time for knee-jerk reactions. He rightly points out the Chinese economy (on a purchasing power parity basis) is still the biggest in the world, and it’s still growing; IMF projections indicate the future rate to be as high as 6.8 per cent.
The current outflow of investment from China does highlight the need to decide carefully about the level of risk you are willing to accept. It is also fair to say that those in the higher end of the risk spectrum are likely to be more exposed to events in China at the moment.
Richard’s view is that there will be peaks and troughs, and you need to decide if you are willing to endure the excitement it brings in the short-term, but with a view to a bigger gain in the long-term.
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