Watching China host the Olympics has confirmed Dr Burton Malkiel's belief that investors should have much greater exposure to China. "It was very difficult to watch the opening ceremony without getting the view that Chinese companies have arrived on the world stage. I've never seen anything so spectacular." He is looking forward to a further important symbol in two years time, when Shanghai is putting on the World Expo 2010 trade fair.
The American economist is the author of the classic investment book A Random Walk Down Wall Street and a leading advocate of the efficient market hypothesis. Now chief investment officer for AlphaShares, an investment management firm dedicated to providing investors with strategies and products that allow them to participate in China's economic boom, he has written another book, From Wall Street to the Great Wall, which sets forth a grand strategy, including sample portfolios, for investing in China.
Investors in China who had their fingers burnt in the past year may not be watching the Olympic games with as much enthusiasm as Dr Malkiel. And the economics professor has a sobering dose of reality for them: "It's been a disastrous year; the declines were staggeringly large, but this is unfortunately in line with historical precedent". History, according to Dr Malkiel, shows the Chinese stock market is the most volatile in the world - even compared with other emerging markets such as Brazil, which is notoriously volatile.