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Thursday, May 28, 2015
China will ultimately make up 50% of one of the world's major emerging-markets indexes...
"Who cares," you might think, at first...
YOU ought to care...
You see, hundreds of billions of dollars will flow into Chinese stocks in the next two or three years...
That's because trillions of dollars are invested based on what's in these major stock indexes... If the index dramatically increases its stake in China, then index-based investors will have to move money into China. The amount of money moving in, ultimately, will be in the hundreds of billions of dollars.
For the specifics...
This week, FTSE Russell (one of two leading providers of international stock market indexes) announced big changes to its emerging-markets index. It plans to dramatically increase China's percentages over the next two to three years.
According to a Reuters news story, the new FTSE emerging-markets indexes "will have an initial weighting of 5 percent for China A shares. That will rise to 32 percent when the shares become fully available to international investors." That is a massive change!
"When taken together with other types of China shares, including those listed in Hong Kong, Chinese shares would then account for 50 percent of the emerging-markets index, said FTSE Russell. It has scheduled an update of its plans in September."
My paid subscribers have been profiting handsomely from my China ideas already...
We are up 112% in eight months on our main China stock recommendation. Now that China has soared so much, in the latest issue of my True Wealth letter I've shared the specifics of a surprising, lower-risk way to profit from all the money that will flow into China.
Regardless of how you're investing in China, this decision by FTSE Russell means hundreds of billions of dollars will flow into Chinese stocks.
So even though Chinese stocks are up a lot, your upside potential is still dramatic. Make sure you're on board...
Steve still sees more upside in U.S. stocks. "The current stock market boom has aged gracefully... and in my opinion, has a lot more life left in it," he writes. Find out why here.
He also sees more gains ahead for Japanese stocks. "In short, Japan still has plenty of room to run," Steve writes. Get the full story here.
THIS UPTREND IS GOOD FOR AMERICA
Manufacturing stocks are rising... and that's good for America.
Regular readers know we keep tabs on the price action in critical sectors of the market – like the housing, financial, retail, and manufacturing sectors. When these stocks are booming, we know America is doing better than the pessimists would have you believe.
Honeywell International (HON) is a "bellwether" of the manufacturing sector. It doesn't have the high profile of General Electric or 3M, but it is a true giant in the industry. It produces a wide variety of products for the medical, chemical, automotive, construction, and airline sectors. It also employs about 130,000 people worldwide. Nearly half of those jobs are U.S.-based.
As you can see in today's chart, the stock is in a major uptrend. Last week, shares hit a new all-time high... They're up nearly 100% in the past three years. GE and 3M are also in long-term uptrends. U.S. manufacturing is growing. And that's good for America.