Please ensure Javascript is enabled for purposes of website accessibility

What to Consider Before Investing in Chinese Stocks

By Rachel Warren and Toby Bordelon – Dec 8, 2021 at 1:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This market comes with its fair share of risks.

The possibility of U.S. regulators delisting Chinese stocks continues to rise, and this fact has kept some investors away from these companies entirely. In this segment of Backstage Pass, recorded on Nov. 5, Fool contributor Toby Bordelon responds to a member's question about investing in Chinese stocks right now. 

10 stocks we like better than Walmart
When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

Stock Advisor returns as of 6/15/21

Toby Bordelon: Let me also before we move on address Colin's question, you've been waiting patiently. "Any thoughts of China investability?" I would not call myself an expert on China by any means. I think it's certainly investable.

I do have some investments in Chinese companies myself and don't really have any intention of getting rid of them anytime soon. I think you've got to be careful. There's always been political risks there.

I think that's more so now since we seem to have some escalating, you want to call them trade wars or technology wars, or just China versus some of the Western countries, that feeds into that. Now, we've also got those fights over, oh, are we're going to make Chinese companies not allowed to list in the United States?

Are they going to go back to the Chinese exchange, maybe Hong Kong make it harder for U.S. investors to invest in them? There is that going on now more so than there was before.  

That is a risk that you definitely want to consider. I would say if you've got some favorite companies, especially the big names, I think it's probably OK.

Just whatever you were thinking the risk level was a couple of years ago, take it up a couple of notches and then allocate accordingly. I think that's the best I have.

I don't know if you guys have any thoughts on that if you're China investors or not. Thanks for the question.

The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.