Yesterday was a quite amazing day for stock market. The US market (Dow, S&P, and Nasdaq) went up the most in 5 years, after the dear friend of Wall Street (Mr. Ben Bernanke) cut the interest rate by 0.75%. Here are details in the news (Dow 416 points gain, Fed rate cut sends market soaring). This means the interest rate lowered from 5.25% to 2.25% since last Sept. That’s 300 basis points in 6 months!. While I was happy to see my little portfolio went up 4.8% yesterday, I think the US dollar will worth less and less (vs. Yuan), considering the reckless US economy policy and the fundamental problems underlining the economy (high labor cost, addition to consumer spending, etc.).
(Source: Kansas City Star)
Incidently (remember March 17 is St. Patrick’s day, the green), yesterday I received an email from USCIS telling me that my permanent residency application has been approved (after almost 6 years). I don’t think too much of this green card thing, at least that’s what I felt when I went to work this morning (see I still got to work).
Seriously (when I think more carefully about it), the longer I stay here, it’s like I invested more and more in the US. I am not only talking about the time being spent there (opportunity cost?), but the 401k (the inflation caused by weakening USD), the social security tax paid (God knows when I retire, whether it will be available or not). We know $4 gas is coming this summer, maybe $4 big mac is coming next year 🙁
But the problem is I see more opportunity and growth in China economy then the US. So what’s my point? I am not saying leave the US now, just because the US goverment and the market seemed so dismal now. Remember one can never make money by panic. I do like my job and I do have some control over 401k, in which I invested 50% in foreign stocks (funds). Can not do too much about social security. But I can invest/speculate the left-over money each month, hopefully in foreeable future I can build a portfolio big enough to take care of my family financial needs.
I know it’s going to be a long road, but I know one thing: stay away from craps like Ninetowns, XFML, Heelys, Crocs,…and focus on companies have the real moat (not hype 🙂