Chinese stocks are going sky high. Here are some ways you can play the market and protect yourself from a correction that will come.

Investors should proceed with extreme caution, but there are ways to benefit from China's stock market boom.

There are essentially two ways for investors to approach the Chinese stock market boom: either not at all or very carefully.

The Chinese markets, said Axel Merk, manager of Merk Hard Currency fund, are not “an investment opportunity,� but rather “a speculative opportunity.�

Anyone concerned with commonly used economic barometers -- such as stock price to earnings ratios and market valuations -- should steer clear of Chinese stocks at the moment, Merk said.

On the other hand, it would be foolish to ignore China as a long-term investment.

“It’s a story you have to know as an investor,� said Chris Ciovacco, a certified financial planner with Ciovacco Capital Management in Atlanta. “They have to look at it. They have no choice.�

Ciovacco recommended China be approached broadly as “an emerging market play to capitalize on any country that can capitalize on China’s vast growth.� Russia is such an example, or any other country that sells oil to China, he said.

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Submitted: Nov 29, 2007    Views: 355    Comments: 0    Likes: 3   


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