EDITOR'S LETTERMerryn Somerset Webb
It’s time to buy China
Everyone’s bullish. But most people have a strong feeling that it’s dangerous to be bullish. I think that pretty much sums up the feeling in the market right now.
We all know the US is fully valued and probably grossly overvalued, for example. But we also know that the US Federal Reserve is likely to keep on with its programme of quantitative easing (QE) for many months to come; that Japan, which has already printed more money than the US relative to its GDP, is only just getting warmed up; and that at some point the European Central Bank will have to join the party too. And if we have learnt anything from the last few years, it is that if you print a pile of money and chuck it into the asset markets, prices go up – which is why we told you a few years ago that it didn’t really matter much what you bought, as long as you bought something.
That’s probably still the case. We are worried about bubbles (you could say we are always worried about bubbles), but we also recognise that QE means rising stockmarkets. So what to do?
• Read the full editor’s letter here: It’s time to buy China