Welcome back to "
Over the past two years, countless American investors have worried about a potential recession in the United States. Fewer people have worried about a recession in China.
But maybe they should. For decades, China's economy seemed unstoppable — the country's GDP grew at 14.2% in 2007, according to
In addition, China's real estate market is in crisis. After the country's second-largest developer, the China Evergrande Group, defaulted on its debts, dozens of other developers followed suit. And as the
READ MORE:
All of this is more than enough to spook many Western investors, who have been fleeing the Chinese market
Dear advisors,
Ten or 15 years ago, investing in China seemed like a no-brainer, but today I'm getting the opposite feeling. Should I divest from Chinese stocks?
These days I keep seeing headlines about China's increasingly authoritarian government, lack of transparency and a real estate bubble that might wreck its economy. And to top it all off, the country's famous growth has slowed to a crawl, raising fears that it may enter a recession.
Should I pull my money out while I still can? Right now I have about $20,000 invested in an international index fund. I don't know how much of that is in Chinese stocks, but I'm wondering if I should sell that part and invest it somewhere safer. What should I do?
Sincerely,
Nervous in New York
And here's what financial advisors wrote back: