Once upon a time, the United States was the Big Dog on the block and the King of the Initial Public Offering (IPO). While our ranking as a superpower hasn’t slipped to “also ran” status yet, young entrepreneurs should keep an eye on what is shaping up to be the most massive new market to come along in awhile – maybe ever. We are, of course, talking about China. Not only is the communist juggernaut leading the world’s economic charge, it’s also where the most IPO’s are taking place these days.
Why should young entrepreneurs care about IPO’s? Not so much as to whether or not you should invest in them, though that could certainly be part of the equation. The real factor to take into consideration is that where there are
IPO’s, there are ideas and innovation. That’s where the action is, and where there is money to be made. Not that you can’t still become filthy, fabulously wealthy in the United States. There is always that possibility, especially if you happen to be a billionaire heiress with a penchant for bad behavior, or an American teenager in Orange County.
But if you do want to cash in on the sense of vigor and vitality in the Chinese market, there is a way for young entrepreneurs to profit without going directly to Chinese traded markets. ETF’s are one option, as are American Depositary Receipts, which lets you invest in companies like Suntech Power and JA Solar Holdings through the American stock market. Mind you, we’re not suggesting you run out and sink everything you own into these particular companies. Keep in mind that some will make it and some won’t. Remember those late 1990’s heady dot come days when everyone and their grandmother was going public with an IPO? A very few had sensible business plans and lived to become legitimate companies – Amazon and eBay are two.
The real point of this is to encourage young investors to broaden their horizons. Extend your vision beyond the shores of America because opportunity can be found in places you never thought of looking. One thing is certain, the tsunami we know as the Chinese market is not going anywhere any time soon.
The Young Wealth Team
Flickr / marcus.tan.yi.wei