Who Says September is a Dismal Month?

Robert Hsu, September 15, 2009

Since the beginning of September -- infamous for being the weakest seasonal period for U.S. stocks -- markets around the world are actually holding up rather well, especially China. China's A-Share market in Shanghai has rallied more than 13% in September.

Compare that with India's Sensex 3.5% gain, the S&P 500's 2.8% gain and Europe's 2.2% gain, and there's no denying that Chinese stocks are outperforming once again. And many of our China Strategy holdings are plugging right along with it.

Just take a look at a few of our China Strategy portfolio recommendations that have posted fantastic gains in September so far:

A leading Chinese real estate developer, soaring 21% since September 1. Housing prices have appreciated dramatically so far this year, and China's real estate sector is sizzling, with demand high and rising home prices. In fact, I just recently shared with my China Strategy readers that the price of housing in 70 of China's large and medium-sized cities increased 2% in August year-on-year.

A little-known Chinese oil services equipment company, up 16% for the month. I just met with the management team of this company last week, join my China Strategy service to find out what I learned.

China's Google, up more than 13% in September. Check out this story on how this company is innovating to take advantage of e-commerce in China, improving both their customer's confidence in online shopping and their company's credibility.

You can't argue with the numbers -- Chinese companies are on a roll right now!

But what's helping Chinese companies outperform? China's economic turnaround in the second quarter, as well as continuing economic strength this quarter. And its all thanks to the Chinese government staying focused on pulling the country out of the global economic downturn by boosting Chinese domestic spending and investment.

As a result of China's economic rebound, we're continuing to see the country report stronger economic data on a regular basis. In fact, just-released numbers for August saw an unexpected expansion in new lending in China as well as the country's industrial production rise at a faster-than-expected pace. Output from Chinese factories jumped a whopping 12.3% year-on-year, the most since August 2008. And when combined, these two pieces of good news are strong indicators for China's growth to continue to accelerate.

That's why I've stuck to my guns and remained focused on investing in the best opportunities in China with my China Strategy service -- despite the naysayers. Sure, China was one of the hardest hit stock markets in the world last year. But China is also proving they have one of the quickest-bouncing economies with the ability to overcome the global financial slowdown, already on-track to post 8% GDP growth this year. And that type of economic strength bodes well for Chinese stocks – as we've already seen this year.

So, I'd like to invite you to join us at China Strategy, where we're striving to take advantage of the economic strength of China for profitable investments -- even in a "dismal" month like September.