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Chinese vs China & Extremity vs Balanced


Saw two interesting articles from the US press:

  1. Why Chinese Mothers Are Superior
  2. Why the Chinese Don’t Spend

China and being Chinese is in the news. President Obama had an important speech yesterday and talked about the rise of China through education and spending on research.

It’s important here to stress that China and being Chinese can be two different things. Someone who is Chinese can be living in a country other than China and hold a different citizenship. So being Chinese does not equate to being a citizen of China. There may be a billion Chinese citizens from China, but there are many millions more who are citizens from a wide spectrum of countries all over the world.

If you had look at the two posts, you would find one article which forces you to think about the issues relevant to the world today. Like a safety net, higher wage growth, distribution of wealth, investment by government.

The other article is purposely (at least I think) over the top. It talks about the almost ‘god’ status of the Chinese parent. I cringed when she described the episode of how she ‘encourages’ her child to overcome and learn a piano piece.

I believe a balance or hybrid model works in most cases. Neither too strict nor too overbearing.

I remember when I was about to graduate as a teacher, there was this old principal with loads of experience from a neighbourhood school who had this to say about parents:

“One type of parent treat the child as the ‘king’ and allows the child everything that they want. Another is so strict with the child that there is no or little happiness for the child. A parent should balance both approaches and use each type when the situation warrants it”

Even in investing, I believe this model is one which will work better than most. Instead of saying passive investment is better than active or vice versa, why not practice both?  Index funds versus unit trust versus ETFs? Why not get a bit of each type?

For me at the moment, my ETFs % increase are more than individual stock holdings. Does that mean that I don’t buy shares? Once, it was the other way around. I believe that different investment classes all have their day in the sun, then gravity takes over and revision to the mean happens.

So I have in my portfolio, stocks in different industries, REITS, ETFs, unit trusts, an index fund.

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