January, 2013 (Chinavestor) The beginning of a new year is always an opportunity to assess lessons learned from the last year and to address what to expect from the upcoming one.
For the record books: the Hang Seng Index (INDEXHANGSENG:.HSI) advanced 20.0% in 2012, the most among major indexes tracking Chinese stocks world wide. While the jump looks excessive, one has to remember that the Hang Seng Index has been historically a lot more volatile than its US counterparts. Investors don’t have to go back far to find a jump of 51.5% in 2009 that came on the heels of a 43.4% dive a year earlier.
The China ADR Index, tracking the performance of Chinese ADRs listed on the NYSE and NASDAQ, rose 11.2% for the same time. This advance was twice as much what the Dow Jones Industrial Average (INDEXDJX:.DJI) registered for 2012.
Stocks surged as much as 14.6% in December in Shanghai, bringing the index back to the black for all of 2012. Yet investors had a rough ride with the Shanghai Composite Index (SHA:000001) for the second part of the year, except for December. Investors that sold off at the beginning of December were left in the cold. This again is a stark reminder that timing is key in investing.