Ah yes, the holy trail of investments. This one, we swear, won't go down! Really, look at all the reasons. Just like housing. It's not like their banks have billions of yuan in loans to companies or government investment vehicles which large numbers of economists question the viability if.
Your arguments appears to directly contradict your skeptical position. If there are a lot of bad loans on the books of Chinese banks, then the inevitable write offs of these loans will cause massive asset deflation, same as it did in the US in 2008. The result will be currency appreciation, or at least the pressure to appreciate, given the currency peg presently in effect, and holding such currency is appears to be a great idea.
It seems that if the goal is to diversify, there are plenty of other options. That isn't to say that this one is bad, but I'm deeply skeptical of any investment once the press starts running articles about why you should buy into it.
Yeah; "diversify for safety by buying this one particular thing we're doing our best to make wildly popular" strikes me as disingenuous advice. "Diversify by holding a portfolio of small, mid, and large-cap domestic and overseas equities, ETFs, bonds, real estate, and other assets in proportion to your risk tolerance and investment horizon" seems to hold up better with a year's hindsight.
Comments
tl;dr version
It's very unlikely to go down.
It's very likely to go up.
You won't miss out on a lot of interest elsewhere, as nowhere else is paying a lot of interest.
It will diversify your portfolio.
And, finally, it may offer you and your family something of a hedge against the decline of the U.S. economy.
Ah yes, the holy trail of investments. This one, we swear, won't go down! Really, look at all the reasons. Just like housing. It's not like their banks have billions of yuan in loans to companies or government investment vehicles which large numbers of economists question the viability if.
Your arguments appears to directly contradict your skeptical position. If there are a lot of bad loans on the books of Chinese banks, then the inevitable write offs of these loans will cause massive asset deflation, same as it did in the US in 2008. The result will be currency appreciation, or at least the pressure to appreciate, given the currency peg presently in effect, and holding such currency is appears to be a great idea.
It seems that if the goal is to diversify, there are plenty of other options. That isn't to say that this one is bad, but I'm deeply skeptical of any investment once the press starts running articles about why you should buy into it.
Yeah; "diversify for safety by buying this one particular thing we're doing our best to make wildly popular" strikes me as disingenuous advice. "Diversify by holding a portfolio of small, mid, and large-cap domestic and overseas equities, ETFs, bonds, real estate, and other assets in proportion to your risk tolerance and investment horizon" seems to hold up better with a year's hindsight.