This China ETF Is A Great Way To Increase Your Returns

| September 18, 2009

I’ve got to come right out and say it.  I’m fed up with the incompetence in Washington.

It’s no secret our government is bitterly divided down party lines.  Issues are politicized for personal gain.  And re-election seems to be the only thing politicians on either side of the isle really care about.

But something I caught wind of the other day really burns me up.  It’s just stupidity in my opinion.  And it’s putting the brakes on stimulus funds.  Funds our economy desperately needs to pull us out of the recession.

It’s the ‘Buy American’ clause attached to the stimulus funds.

Now before you string me up for being anti-American, let me explain.  I want American tax dollars to create American jobs.  But ‘Buy American’ is nothing more than a political stunt designed to help politicians get re-elected.  It doesn’t help create new jobs.

I understand it sounds great to say we want stimulus funds to buy stuff made by Americans.  It’s simple to think we’ll get the most out of these funds by buying everything from American companies.  But that logic is too simple.

The truth of the matter is we live in an interconnected world.

You can thank free trade agreements like NAFTA for dictating how businesses operate.  I’m not here to argue one way or the other for free trade agreements.  But this is the reality we live in.  Doesn’t it make sense to draft legislation that fits within the current framework of our economy?

Right now, American companies manufacture products in China, Canada, Mexico, and many other places around the world.  And foreign companies have manufacturing facilities in the US and employ American workers.

I read an article in the Wall Street Journal earlier this week that points out just how bad the situation is.

The article points out cities are trying to put American workers back to work rebuilding our outdated sewage systems.  But essential parts of these systems are built in Canada.

Thanks to the ‘Buy American’ provision, these projects are being delayed. The cities are being forced to seek an exemption from the provision.  The result is American workers who could be working on these infrastructure products aren’t.

There aren’t any official statistics on how many projects are being delayed because they need foreign made parts.  And there’s no list of how many exemptions have been sought.

But I can tell you only $13 billion of the stimulus funds have been paid out so far.  And that’s a far cry from the amount of funds that are available.  I don’t think its a leap to say stimulus funds are being delayed because of the ‘Buy American’ provision.

I guess there’s one thing that bothers me more than anything.  We’re seeing other countries implement their stimulus packages faster and more efficiently than we are.

It’s time we get the message through to our elected officials.  We’re not going to stand for Washington’s incompetence.  I encourage you to let your representatives know how you feel about counterproductive legislation like this.

In the meantime, investors are stuck with the cards we’ve been dealt. And we need to find the best place to put our money to work.

If you’re looking for a country that’s getting the most out of its stimulus package, take a look at China.  The Chinese government is committed to growing their economy by 8% a year.  And their actions are speaking louder than any American politician’s words.

The way it’s shaping up, the Chinese economy is going to outpace the US by a landslide.  And their stock market is too.  If you don’t own Chinese stocks already, I’ve got an easy way for you to add some.

It’s an ETF of US listed Chinese stocks.  The PowerShares Golden Dragon Halter USX China Portfolio (PGJ).

I believe the US economy is going to recover.  We’ll get things straightened out… eventually.

Right now China is doing more to get their economy growing.  I expect Chinese stocks to outperform US stocks over the next few years.  And PGJ is a great way to make sure you don’t miss out on this great opportunity.

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Category: Foreign Markets

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets on a daily basis. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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