Investing in Asia

[Dreadnaught]

As I've mentioned before, my strategy for the recession was to have a year's worth of cash on hand in case of emergency. I made that goal a while ago at the expense of being considered a cheapskate. Oh well.

Over the past ~18 months I've begun moving my extra cash savings into stocks and the like. But I've wanted to broaden my strategy and invest in Asia. My best-performing Asian stock was Baidu, which I sold last year right before it did a nice 10:1 split (oops, but still made a profit).

At this point I'm willing to accept that it's a lot more difficult/time consuming for me to analyze Asian securities markets and I'm willing to invest in a mutual fund. But I'm concerned about the costs.

I've looked at two Asian-focused mutual funds:

Matthews Asian Growth & Inc Investor (MUTF:MACSX)

and

Matthews Asia Dividend Investor (MUTF:MAPIX)

Some of my benchmarks are Vanguard Total Intl Stock Index Inv and my standard boring Vanguard Wellesley Income Inv (MUTF:VWINX).

Now if I line up these funds in FINRA's great tool that calculates the relative costs of any three funds over time, it's clear that the Matthews Asia funds are several times more expensive over time.

So in order to invest in any of these higher-cost Asian mutual funds, I have to assume that the returns on the Matthews Asia funds will be significantly higher than my [cheap] Vanguard funds in my 401k and most of the individual stocks I invest in. Which is why I want to invest in them in the first place.

So the question is: is it reasonable to speculate that the Asian mutual funds will appreciate significantly more than cheaper US-based stocks/funds to outweigh their higher costs?

[Wraith]

The asian markets scare me a bit. They've been good performers for a while now, but they seem to be overinflated to me. IMO they're riskier, and could suddenly fall at any moment, and I have no idea when that'll be. That said, I have a some money in Matthews China (MCHFX) just in case. It's been my best performing mutual fund since I've bought it.

[Nessus]

You sicken me.

[Hazir]

You sicken me.

There is something inherently evil about people not wanting to have to work untill they are on death's door? Or is it merely that they have plans for life besides offing themselves in the very near future?

[littlelolligagged]

You sicken me.

Which one of them sickens you?

[Nessus]

Which one of them sickens you?

Both of them are worth much more money than I am, so it hardly matters

[Dreadnaught]

The asian markets scare me a bit. They've been good performers for a while now, but they seem to be overinflated to me. IMO they're riskier, and could suddenly fall at any moment, and I have no idea when that'll be. That said, I have a some money in Matthews China (MCHFX) just in case. It's been my best performing mutual fund since I've bought it.

I hadn't looked at that one closely, but now I'm a bit more interested mainly because it's still below 2007 levels and it's not as if China's economy has contracted at all. But why the heck did they give a $1.27 dividend in 2007 and then fall back down to a few cents?

The other reason I sorta want to do this now is because the dividend payments have just been plopped-off on these funds, so it's a psychologically nice time to start an investment. Which really isn't a good reason, but there.

Did you sign up through a Matthews Asia account on their Website? Sadly I can't seem to buy their funds just through Sharebuilder.

You sicken me.

Why? We're planning ahead so that we won't be wards of our state. We're also putting our money to work instead of keeping it under our pillows. We are patriots.

[Nessus]

Why? We're planning ahead so that we won't be wards of our state. We're also putting our money to work instead of keeping it under our pillows. We are patriots.

That you have to put a sarcasm-indicating smilie behind a dishonest statement about your allegiance speaks volumes. And once more I would like to point out how monstrous it is to paint all in need as "wards of the state" in the implied sense that they are useless losers who are mooching off of your hard-earned money instead of the genuine humans in plight that they are. The hedonistic nihilism embedded into your (and increasingly mine) culture is as abhorrent as it is inhumane. But this is the tide of the times, and I suspect you'll learn to speak Chinese in your lifetime.

[Dreadnaught]

I think those who had a lifetime and the resources to save, but didn't, are losers. If you've been poor all your life that is obviously a different case. I'm not anti-charity. Though you seem to be anti-progress, which concerns me.

[Nessus]

I'm fairly certain that there's not that much of a leap between labeling people as 'losers' in this sense and calling them Lebensunwertes Leben, but that's just me.

If you don't mind, could you open your statement about me being against progress some more? I am working at the fore-front of the natural sciences, but I suspect you have some opinion about my life-style that contradicts that.

[Dreadnaught]

I think your shock and horror at what is really a fairly mundane thing. The roads, universities, companies and service you enjoy are at least partially funded by bonds that are investment targets of the kinds of funds I'm looking at.

Putting money in these funds is a common thing. I put money in a fund alongside a hundred thousand other people. You get a new train station. Over time the bond is repaid. It's efficient and beneficial to all of us.

Somehow you have the cognitive dissonance to love the new train station and praise the society that built it, but be totally horrified at the underlying funding mechanism. And you are further horrified that our whole economy is based on these kinds of transactions, yet you are totally dependent on them (as am I).

[Wraith]

Did you sign up through a Matthews Asia account on their Website? Sadly I can't seem to buy their funds just through Sharebuilder.

I do my trading through Fidelity. Found it through them.

[Nessus]

Oh, I do fully realize how much of the wealth around me is funded by what I'd consider callous and useless spending of human time; did you know that the geology department of my university got huge, huge amounts of money from the US because you weren't quite sure you could kill enough millions of humans on Soviet soil? You are trivializing and infantilizing my position because it serves your hedonistic purposes and that's fine, that's what you have been raised to believe is right and proper, I don't fault you in any way. I do pity you, but again since you are worth far more many dollars than I, my pity is inconsequential to you.

[Omega]

Frankly, the nooks under your mattress are the best location(s) in which to invest your money. Sure, it might depreciate a little because of inflation, but in a world werebillion is almost the same as million (April market crash), I wouldn't trust those incompetent clerks

[Dreadnaught]

Oh, I do fully realize how much of the wealth around me is funded by what I'd consider callous and useless spending of human time; did you know that the geology department of my university got huge, huge amounts of money from the US because you weren't quite sure you could kill enough millions of humans on Soviet soil? You are trivializing and infantilizing my position because it serves your hedonistic purposes and that's fine, that's what you have been raised to believe is right and proper, I don't fault you in any way. I do pity you, but again since you are worth far more many dollars than I, my pity is inconsequential to you.

I think the thing is you say these things with patently ridiculous implications. Knowing very little about what most of us here do day-to-day for our living, you nonetheless think that being "at the fore-front of the natural sciences" is inherently more important than being a cog in any other discipline.

My total lack of judgement on your career and life choice seems to have given you the need to put words in my mouth and the need to judge my mundane investment choices.

[Nessus]

I don't think so at all, I base my speculations on your positions purely on the Palinist garbage you post on a regular basis.

[Dreadnaught]

Have you ever looked up my posts about Palin?

[Nessus]

As opposed to your posts on anything else?

[Hazir]

I don't think you can go very terribly wrong on Asia investments for the time being.

[wiggin]

You sicken me.

Nessus - all vitriol aside, I'm very curious what you meant by this. Are you opposed to investment/mutual funds in principle, or are you opposed to investing in Asia, or is there something else I'm missing? I guess I just never knew you felt so strongly about mutual funds.



Dread - I think it all depends on your investment horizon on whether Asian mutual funds are worth the higher management fees and the risk premium. If your time horizon is sufficiently long (and you're not too overweighted in Chinese stocks), it's probably a good deal since long-term growth prospects are probably better in Asia rather than trend growth in the US. That being said, there are some significant political risks, and obviously greater volatility.

On shorter time horizons, I'm not as bullish. There are a lot of near term problems in Asia, particularly China. Valuations are quite frothy, and there are a number of potential bubbles (real estate, commodities, etc.). Also, increasing oil prices are likely to have a disproportionate effect on some Asian economies. This isn't to say that returns might not be better than the US, even after management fees, but the risk-adjusted return might not be worth it on the short term.

[GGT]

Late Night Guess----Nessie's complaint was about the blatant Hedonism. I could be wrong about that, though.

Frankly, Dread's comments didn't sit well with me, either. Too much icky innuendo:

We're planning ahead so that we won't be wards of our state. We're also putting our money to work instead of keeping it under our pillows. We are patriots.

I think those who had a lifetime and the resources to save, but didn't, are losers. If you've been poor all your life that is obviously a different case. I'm not anti-charity. Though you seem to be anti-progress, which concerns me.

[Nessus]

Nessus - all vitriol aside, I'm very curious what you meant by this. Are you opposed to investment/mutual funds in principle, or are you opposed to investing in Asia, or is there something else I'm missing? I guess I just never knew you felt so strongly about mutual funds.

I don't go through my day condemning and swearing investing, either, it just came up in discussion and this was my reaction.

[GGT]

It's worth noting, or asking, why one would look to this particular forum for investing "advice"? Even bothering to put certain funds in colored hyperlinks.....

I mean, you could ask a dozen professional investment advisors and get two dozen opinions.

[Dreadnaught]

Innuendo about what?

I asked here because you all are smart, free and I wanted to bounce an idea off of you.

[wiggin]

I don't go through my day condemning and swearing investing, either, it just came up in discussion and this was my reaction.

So, if I understand correctly you're opposed to investing in stocks and bonds on principle? Ignoring the individual wealth-building angle that Dread and other mentioned, there is a worthwhile reason for it - stock and bond markets allow us to efficiently allocate capital around the world for the most productive uses (rather than having people sit on capital that's doing nothing - improving no lives, funding no infrastructure, employing no people, etc.). There are obvious flaws in this model, of course, but it is one decent outcome of the stock market. I'm somewhat surprised you're so adamant in your opposition - unless I'm completely misunderstanding you.

[GGT]

Innuendo about what?

Innuendo about patriots, wards of state, losers. If you invest in markets that tank, or end up being one of those medically bankrupt by an illness or tragic accident, or find yourself underwater in a mortgage at retirement age.....are you an unpatriotic loser sucking off the the state?

I asked here because you all are smart, free and I wanted to bounce an idea off of you.

Bullshit. Not everyone here is smart (I'm frequently called an idiot even though I have a pretty good head for investments) and none of us are freeeee. You don't even feel freeee enough to use your good judgment on investments, or leave it to your HR department (or whoever invests your 401-K contributions) to make good for you. You feel trapped and confused, worried about where your earned money is going for your future. Hint: don't ask at a forum.

[Dreadnaught]

Innuendo about patriots, wards of state, losers. If you invest in markets that tank, or end up being one of those medically bankrupt by an illness or tragic accident, or find yourself underwater in a mortgage at retirement age.....are you an unpatriotic loser sucking off the the state?

Bullshit. Not everyone here is smart (I'm frequently called an idiot even though I have a pretty good head for investments) and none of us are freeeee. You don't even feel freeee enough to use your good judgment on investments, or leave it to your HR department (or whoever invests your 401-K contributions) to make good for you. You feel trapped and confused, worried about where your earned money is going for your future. Hint: don't ask at a forum.

What.

Are you talking about?

[Wraith]

This thread just keeps getting weirder.

[GGT]

Reading back, it looks different, clearer somehow.

As I've mentioned before, my strategy for the recession was to have a year's worth of cash on hand in case of emergency. I made that goal a while ago at the expense of being considered a cheapskate. Oh well.

Oh well? No, you should be congratulated for having a recession plan that makes good sense. Not just in case of emergency, but as a life plan even during good times. Most people don't have 6 months cash on hand, let alone a whole year.

Not sure how you could be considered a cheapskate when you bought a co-op in Manhattan, took some nice trips, bought some tech gadgets, gave nice gifts during holidays, and even bought a vintage car. All before your 30th birthday.

Sounds like you've got some guilt complex going on (where did that come from?) and you're looking for validation. No wonder you get upset when "we" discuss ethical investments or social justice?

Keep your head straight and logical, as you've done quite well that way. But don't lose compassion for others or thinking with your heart. Donate or tithe 10% of your income. Give your time and talent to others, it's more valuable than money. That's the best investment anyone can make, with no regrets.

[GGT]

What.

Are you talking about?

I was responding to your quotes.