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Chinese Yuan

I see a partial loosening of the Chinese yuan pegging to the U.S. dollar within the next three months. Though it is unlikely that the yuan will be allowed to float freely in near term the currency will most likely be linked to some basket of currencies, such as dollar and euro. As a result, the initial revaluation of the yuan versus the dollar would most likely be between 5% to 10%. Due to the active trade between China and other Asian countries, other Asian currencies will also follow the yuan in their moves. The Asian market has been low in the last few months and it is a good time to get in now. I just moved a portion of my investments from US and European markets to the Asian market last Friday, expecting to make a small profit in the next three to five months.

We will see ..........

(2005.05.24)

posted on 2005-06-28 03:56 coolboy 阅读(1472) 评论(6) 编辑收藏

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#1楼 [楼主]

2005-07-22 09:21 | coolboy

The dollar peg was dropped on July 21, 2005.

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#2楼

2005-07-22 13:20 | awgn

people have been talking about severing the link of yuan to US dollaors for months, and finally China did it. we still expect some more roon for yuan to rise agaist other currencies. maybe one should consider selling US shares and buying yuan. (but that also depends on the share price now)

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#3楼 [楼主]

2005-07-24 16:11 | coolboy

It is probably not a good idea for individuals to directly invest into the currency market for it has a great risk and generally is difficult to predict. A better strategy is to invest into a broad equity market. The currency market has an indirect effect on the equity market. As most people were expecting Chinese Yuan to get appreciation, the international capital will flow to the Asian market, which will raise the stock price ……. This is what has happened in the last two months or so and it should still last for a while.

We will see ……

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#4楼 [楼主]

2005-08-30 03:37 | coolboy

It has been more than three months since I changed my portfolio last time. The Asian market, which is heavily weighted by Japan market, has been up by 11% whereas the US market, which is measured by the S&P 500 index, is only up by 1%. The 10% difference in gain in three months should be more than enough to anyone who is not a greed person. Furthermore, historically, the US market is usually up in the last quarter of the year because fund managers usually work harder in the last quarter in order to get year-end bonus. So, I have moved that portion of my investments in Asian market to the US market.

We will see ......

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#5楼

2005-09-07 00:17 | awgn

um... u have made some money by investing in Asian market.
i have been sitting there and doing nothing to my US shares. i think i am just lazy and reluctant to make changes. :)

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#6楼 [楼主]

2005-09-12 09:16 | coolboy

I wish I moved everything I had into the Asian market four months ago. The only thing one can surely tell is that the market fluctuates. It takes half and half the efforts and luck to make money in a stock market. The basic principle of “a bigger risk leads to a bigger return OR a bigger loss” needs to be constantly remembered. :P

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