Stay away from Hang Seng Index for a while

When the trade war tensions escalated, investors should stay away from Chinese stock markets, especially Hang Seng Index.

Last Tuesday, HSI tanked nearly 700 points and plunged around 2% after US president Donald Trump threatened new tariffs on Chinese imports. And today, HSI drops 1% even though China’s government released 700 billion yuan in cash to markets. We will see that the major investors are not going to buy more stocks from HSI and actually they might already locked in profits before the large fall. While Xiaomi opens its retail book today, I may suggest individual investors think twice before subscribing during a bearish market sentiment.

The stock market is a device for transferring money from the impatient to patient. Be patient!

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Still want to buy a micro flat in Hong Kong?

In Hong Kong, real estate prices are sky-high. As the housing prices keep rising, some hongkongers just cannot wait to buy flats while some are worrying about they cannot afford to buy.

Let talk about the real estate phenomenon in Hong Kong. Firstly, the prices are at an all-time high. Secondly, most of the latest apartments are micro flats which are less than 200 sq ft and too small to live. Thirdly, many investors target to gain from property market.

If you were Hongkonger, would you buy a flat in Hong Kong? Some may say “Yes” as there seems to be no reason for property prices to plunge. However, I may say “No” for this decision now. In my opinion, the prices are too high and are absolutely not affordable for local Hongkongers. And that is the reason why Hongkongers try to buy properties in Japan, Taiwan and other East Asia countries. Furthermore, one of the reasons why the property prices keep rising is the hot money from China. Those investors do not plan to live in Hong Kong and they just want capital gains. They must lock in their profits by selling and they are waiting for the perfect time. Property investment is different from stocks/funds/commodities investments, property is illiquid and it would take time to sell in order to raise cash and release capital. While the US escalate the trade war with China, and it may trigger the Chinese investors to sell their properties. Just wait for the bubble burst in Hong Kong property market which is going to happen in 2018.