Watch Freddy Lim, StashAway Co-founder and Chief Investment Officer, Philipp Muedder, Head of Financial Planning, and Stephanie Leung, Group Deputy CIO, discuss the latest global events and their potential impact on the markets and on our investment portfolios.
In this episode:
1. StashAway Market Commentary 24 June 2021 [0:00]
2. What’s behind the 10-year Treasury Notes’ fall in yield? [0:10]
3. China’s anti-sanction laws in perspective [2:37]
4. Which investments hedge against inflation in your portfolio? [4:37]
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China’s Anti-Sanction Laws: What Investors Need to Know
In recent years, tensions between the United States and China have escalated, leading to a series of sanctions being imposed on Chinese companies and individuals. In response, China has implemented its own set of anti-sanction laws aimed at protecting its interests and economy. These laws are designed to counter the impact of foreign sanctions and to safeguard Chinese businesses and individuals from the adverse effects of these punitive measures.
The anti-sanction laws, which were introduced in June 2021, give Chinese citizens and organizations the legal right to take action against the companies and individuals that comply with foreign sanctions. The laws also allow Chinese courts to issue rulings against foreign entities that enforce sanctions on Chinese citizens or organizations. Furthermore, the laws prohibit any compliance with foreign sanctions that would harm the interests of China or its citizens.
For investors, China’s anti-sanction laws have significant implications. As tensions between the US and China continue to escalate, there is a heightened risk of further sanctions being imposed on Chinese companies and individuals. This creates uncertainty for investors who have business dealings with Chinese entities and who may be subject to these sanctions.
In light of these developments, investors are looking for ways to hedge against the potential impact of these sanctions on their investments. One key strategy is to diversify their portfolios and explore investment opportunities in assets that are less susceptible to the effects of global geopolitical tensions. In this context, investments in assets that can hedge against inflation become particularly attractive.
One asset class that has historically proven to be a reliable hedge against inflation is real estate. In periods of economic uncertainty and rising inflation, real estate has demonstrated resilience and the ability to preserve and grow wealth. Investing in real estate assets in China, such as commercial properties or residential developments, can provide investors with a tangible and stable investment that is less vulnerable to the impact of geopolitical tensions and sanctions.
Another investment avenue to consider is precious metals, such as gold and silver. These assets have long been recognized as safe havens during times of geopolitical turmoil and inflation. They have a track record of preserving wealth and serving as a hedge against currency devaluation and rising inflation. Investing in precious metals can provide investors with a portfolio diversification strategy that can help mitigate the impact of potential sanctions on their investments.
In conclusion, China’s anti-sanction laws have introduced a new level of uncertainty for investors with exposure to Chinese entities. As tensions between the US and China continue to escalate, it is essential for investors to consider strategies to hedge against the potential impact of these sanctions on their investments. Diversifying portfolios and exploring investments in assets that can hedge against inflation, such as real estate and precious metals, can be effective strategies to safeguard investments in the current geopolitical environment.
Hey I noticed that you mentioned that one of the better hedge against inflation is real estate or REITS. I know you're in an all weather strategy at the moment, but will you be increasing REIT in the portfolios? I notice only the 36% risk portfolio has 7% of REIT allocation, and the rest don't have any REIT exposure.
Hi. I have been hearing people discussing about Besel 3. May I have an explanation of what that is and how that may impact the price of gold in general? Thanks.
Hi everyone.. Appreciate to know whether stashaway have any exposure through kweb or others to smaller tech companies in China that may benefit from the government effort to reduce monopoly by the bigger tech companies like Alibaba and Tencent? Thanks
Hi Stephanie, can you talk a bit about china's crackdown on Education Tech sector? KWEB has holings like TAL and EDU etc which has taken a beating recently..and also share your opinion on what to expect from government over the next 6 months to 1 year on chinese tech giants such as BABA, TCEHY, Bidu, JD etc..
Hi Stephanie, you touch on there are different types of inflation. Could you give us a simple summary how we as investors & StashAway should react (or not react) vis-a-vis each type of inflation?
Thanks for answering my question!