Your Bias Against These Stocks Is Costing You Money

China and President Trump have something in common…

It seems like 99% of their news coverage in the U.S. is bad.

The problem for China is that unlike Trump, it doesn’t have a Twitter account with 62 million followers.

That’s partly China’s fault… because it bans the use of Twitter. It can’t redirect the narrative being strewn on the mainstream media.

And it can’t effectively counter Trump’s China-bashing tweets, including his most recent…

China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal with the U.S., and wishes it had not broken the original deal in the first place…

Look, I’m no preacher for all things China. But you can see why it’s easy to develop a bias against the world’s second-largest economy.

The problem is, bias against China could be costing you a lot of money.

Let me explain…

With the S&P 500 Index up 20.4% for the year, the U.S. stock market is the envy of the world right now.

Most folks haven’t realized it, but Chinese stocks have nearly kept pace with that stellar return.

China’s Shanghai Composite Index is up 19.9%.

There’s a similar story taking place in these two countries’ biggest and most important tech companies… where China’s best are nearly keeping pace with the U.S., too.

I’m talking about four of the largest technology-driven Chinese companies – three of which trade publicly in New York.

This includes Alibaba (BABA), Tencent (TCEHY), (JD), and iQIYI (IQ). They have a combined market capitalization of nearly $1 trillion. And after a rough 2018, they’re soaring this year…

In 2018, the trade war slammed anything and everything that had to do with China. But so far this year, these stocks have performed exceedingly well.

The average year-to-date return for these Chinese tech stocks is 29%. And that nearly matches the returns from the U.S.’ most famous tech giants…

That group includes Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL). They’re collectively known as the “FAANG” stocks.

Combined, they nearly have a $3.5 trillion market cap. That’s about the size of the entire Shenzhen Stock Exchange – the smaller of China’s two stock markets.

But while the FAANG stocks wiped the floor with those top Chinese companies last year, 2019 is turning out to be a different story. Look at how the U.S.’s tech leaders have done…

On average, these U.S. tech stocks are up 32.3%. That’s impressive. And it just barely beats China’s hottest tech companies today.

I don’t expect this will last forever, though. Indeed, last week I showed DailyWealth readers how China’s stock market has severely underperformed its own booming economy. Chinese stocks need to soar an eye-popping 1,100% from present-day levels just to catch up with China’s economy.

That’s why I expect a huge catch-up rally over the coming years. And China’s big tech names will be an important part of it.

The point is… the U.S. is performing fantastically this year. But if you’re only thinking about the U.S., you’re missing out.

You wouldn’t have known this listening to the news. That’s anti-China bias in action. Don’t let it fool you into missing out on the big opportunities happening in China right now.

Good investing,

Brian Tycangco

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Source: Daily Wealth