In the video before I ask a counterintuitive question – could technology actually get smaller in 2021 or 2022?
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In the answers below I focused on:
- How can somebody living in Africa invest in US stock markets? Is DIY or using an advisor better?
- How can somebody build wealth from the age of 18?
- What are some of the biggest reasons why many wealthy Chinese people invest overseas?
- Why are stock markets increasing during moments of uncertainty like this?
As a preview, I have copied part of my article below
You might have read about this man recently – Jack Ma:
The party warned him that he isn’t more powerful than they are. Right now, he isn’t said to be in hiding, but they might move more aggressively against him.
They have made other statements of intent in recent years, including cracking down on Fan BingBing:
And Guo Wengui, who was once a mighty businessman, and is now an “exiled” billionaire:
Added to China’s unstable (note stable and volatility aren’t the same thing. More volatile systems tend to be more stable long-term) political system and history of social unrest, and plenty of wealthy Chinese people make the sensible decision not to put all their eggs in the China basket.
Many get foreign passports as well. In Beijing and Shanghai and beyond, there are many Chinese returnees who used to live overseas, who are living in China on foreign passports.
As China doesn’t recognise joint passports, this makes them partially expats in the country of their birth.
It makes sense on many levels, as it is a way to diversify assets and risk.
Having eggs in many baskets, with some assets in China and some overseas, will ensure they are more likely to gain regardless of the future success of China.
In addition to that, you have another issue. Mainland China’s most prominent index, the Shanghai Composite, has performed very badly since 2016.
In fact, it has been one of the worst performing stock indexes in the world.
That doesn’t mean it will always be that way. It did very well in the 1990s and until 2006, and had a good year in 2020.
Yet it isn’t perceived in the same way as say the S&P500 or Dow Jones, which have always eventually hit fresh record highs after every crash.
Taken together with the fact that the Chinese real estate market which was once hot, isn’t firing on all cylinders anymore, makes overseas diversification a sensible move even for people who aren’t ultra rich.
In fairness this isn’t a Chinese only issue. Globally most people don’t like to put all their assets in one countries basket.
That is especially recognised in countries which have had recent troubles in the last two or three generations.
I am often asked why wealthy people lose their wealth. One of the biggest reasons is complacency.
I saw it with some private business owners operating in Egypt and Tunisia in 2011.
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