East to West: The long game

It pays to regularly step back from daily fluctuations that characterize short-term charts, to examine the big picture using monthly or even quarterly charts.

Over the last 20 years there is one clear winner when comparing major indexes. India.

Major Index Comparison over 20 Years

Even after adjusting for a weaker (INR) currency.

US Dollar compared to Indian Rupee and Chinese Yuan

Over the last 5 years, however, the DJ China 15 Index has outstripped the Dow Industrial Average and DJ India 15 when measured in US Dollars.

Dow Jones US, India & China in USD

But the picture changes when comparing ETFs based on broader-based indexes.

Dow Jones US, India & China in USD last 2 years

While volatility is a problem, growth in these two rapidly-expanding economies (India & China) should not be ignored if investing for the long run. Nor the absence of long-term growth in the UK, Europe and Japan.

4 thoughts on “East to West: The long game

  1. Michael Webber says:

    Re: “But the picture changes when comparing ETFs based on broader-based indexes.”
    Why so different (since I rely on ETFs)?!?!

    Thank you.

    • ColinTwiggs says:

      DJ China 15 follows major companies with operations in China but which are listed on offshore exchanges and is concentrated in Technology and Finance.
      DJ India 15 includes stocks listed on local exchanges and has a much smaller waiting to Technology.
      The broader indices primarily consist of stocks listed on local exchanges.

      • Michael Webber says:

        Thank you. Is there an alternative?

        (Please, only reply if there is. Otherwise I will assume the answer is, “No”.)

      • ColinTwiggs says:

        Best is to select individual stocks if you have time and ability to do the research.

        Most ETFs concentrate on the broad China market but I believe iShares has one that tracks the DJ China Offshore 50 Index.

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