Today marks the Chinese New Year of the Dog! China is still an emerging market esp. when it comes to investing. Emerging or not, it has an increasingly powerful influence on market behavior. Some of these trends have not been yet adopted into professional models and so like last week, we get caught off guard. There is a lot of superstition implied when investors turn to analysis according to the fortune tellers’ horoscopes. The Chinese are thought to be a superstitious folk. Anyway, it is fun.
Donald Trump, George W. Bush AND Bill Clinton were all born in 1946, the Year of the Dog!
DOG – 1946, 1958, 1970, 1982, 1994, 2006, 2018
General – A year of challenges
Wealth – Financial condition is not good, needs patience and effort to recover
Career & Health – Health will affect the career or vice-versa
Another link which hints at how Trump could influence things:
Wealth Horoscope for people born the year of the dog: Unnecessary losses, increased salary, nice investment projects
Chinese zodiac Dog people will obtain a beneficial fortune in wealth. Most of them are suitable to become group leaders. Their insistent and active personal traits will help them catch development opportunities. In the Year of the Dog, they are advised to do several investments related to cultural project or thermal power project. They are accustomed to earning profits by using strategy or even extreme methods. They are suggested to keep a low profile and accept others’ criticisms with modest attitude (hmmmm). It is very important to maintain relaxed and harmonious interpersonal relationships in 2018.
It’s the year of the dog in the Chinese zodiac and historically it has been a good year for stocks (S&P500). Here is one table indicating that 2018 may attract Chinese investors to the US market. On average the year of the dog has a double digit performance according to LPL Financial:
Source: LPL Financial / WSJ-The Daily Shot
Probably investors should buckle their seat belts and look to take advantage of weakness mid-year in preparing for a powerful start into the following Year of the Pig. One good thing about the Year of the Dog, it was the kick-off year- 1982 – for the 30+ years long Bull Market!
“The Dog represents duty and loyalty and is a sign of defence and protection,” says CLSA. “It’s a good time to be level headed and to err on the side of caution. Entrepreneurs should stick with their most loyal clients, and investors are advised not to bite off more than they can chew.”
According to the index, there could be a stock market high ahead. It says: “The Earth Dog jumps out of the kennel, tossing the Fire Rooster back to the barn and sending the Hang Seng index in Hong Kong skyward.
“After a great start, the hound takes a tumble in March which sees the Index head south. Through to summer the market chases its tail and drops, before the Dog and our favourite Earth Rooster, the HSI (Hang Seng index), extend a little more consideration towards each other and get back on track.”
Further according to CLSA: In terms of sectors, the index says to stick with pharma and consumer as the Earth Dog sees strong gains in wood-related industries overall. Telcos/internet, technology and utilities perform well but casinos and transport won’t get a leg up until October.
“Investors who expect decent returns from banking and financials are definitely barking up the wrong tree this year,” says CLSA.
Turbulent Times? The link below from SupChina.com will take you on a roller coaster of history of the most noted Years of the Dog. Common threads: Major infrastructure projects like the Forbidden City, the main body of the Three Gorges Dam, the largest power generator in the world, and the Qinghai-Tibet railway — the first to link Tibet with Greater China, and the highest railway in the world, passing through heights as great as 16,640 feet above sea level — were both completed. Also launched was Baidu Baike, which currently houses more than 15.1 million articles, three times the number of its Western counterpart, Wikipedia–and except for the Forbidden City, the rest was all in 2006! Other years, Confucius met Laozi, Einstein learned of his Nobel Prize while visiting Shanghai, other noted Chinese politicians who basically shaped modern China as we know it today were all born the Year of the Dog –Zhou Enlai 周恩来, Peng Dehuai 彭德怀, and Liu Shaoqi 刘少奇, the devastating Great Leap Forward (Mao) and then several wars, battles and invasions. Let’s hope the philosophers and positive changing political forces rather prevail!
Kung Hei Fat Choy – Happy New Chinese Year of the Dog! Have fun and success and don’t go barking up the wrong tree!