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Thursday, August 4, 2022

China vs Pelosi's visit to Taiwan. Turbulent times ahead?

China vs Pelosi's visit to Taiwan
I can't recall the last time it had captured so much attention when a senior politician visited Asia. Perhaps it was the meeting between North Korea and USA leaders in Singapore. But that meeting was kind of a more peaceful one. This time, not only it had gotten so much attention around the world but it had also created a lot of tension for the region, Asia. And yes, I am referring to the USA house speaker, Nancy Pelosi's visit to Taiwan during her trip to Asia recently. (tweet it)

I will be reserving my political view here since this is more of a personal investment blog. Nevertheless, this event was kind of an intense one and the stock markets especially in Asia had most of their major indices (e.g. HKSE: 3067) trading downwards on that day (i.e. 2-Aug). It was so intense that many of my pals in my investment forum were sharing the news of her visit every few minutes and it was this moment that one of them actually pointed out "Hey, what are we doing here? Why are we watching someone's flight to Taiwan on the Internet when we suppose to discuss our investment thesis here?". Laughter burst out quickly enough but this statement really made our day and brought our focuses back to the original agenda.
 
Fast forward to today (i.e. 4-Aug), the market seems to have recovered a fair bit despite of several responses from China. So has the calm returned, is this all over now? To be frank, I do not know but I think there will be some more turbulent ahead in the market especially the ones in Asia; it really depends on what measures will be carried out by several parties including China, Taiwan and USA. But if I may add a little relief to everyone, I will like to point out to the fact that this kind of geopolitical events usually do not cause major impact to the stock market in the long term; see below.

Geopolitical Events vs Stock Market

With that being said, I really hope there will be more peace than turbulence to our world. We already have enough issues and it wouldn't help any of us with further issues. So god bless and stay safe, everyone! Thanks for reading and please follow my blog if you enjoy this article.

Disclosure: I own shares in Hang Seng Tech Index ETF as of this writing.

3 comments:

Anonymous said...

It's one of the reasons why I switched out of most of my Greater China funds in 2019, after holding them for 10 years. TSMC used to be one of my largest single holdings. 2/3 chance of China invading or at least attacking Taiwan in the next 15 yrs. They need to decide as aging demographics & potential for longer term GDP stagnation or decline is not in China's favour. Don't want to spent mental bandwidth monitoring this particular geopolitic.

Anonymous said...

Well covered, thanks for sharing!

The True Freedom said...

Thank you for reading.

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China vs Pelosi's visit to Taiwan. Turbulent times ahead?

I can't recall the last time it had captured so much attention when a senior politician visited Asia. Perhaps it was the meeting betwee...