What the experts say

Growth stocks defy odds; Riding China’s boom; A lesson in savings

Growth stocks defy odds

In these times of economic uncertainty, you’d think that investors would flock to defensive stocks, said Paul Lim in The New York Times. But “money managers are betting on what has often been a riskier segment of the market: growth stocks.” Since July, growth stocks in the Russell 1000 index are up 2 percent, while “defensive-minded value stocks” are down more than 7 percent. Growth stocks make sense now for a few reasons. If the Federal Reserve keeps cutting rates later this year, as it’s expected to, growth stocks should benefit. Many growth stocks also have been laggards recently, giving them “less room to fall” if the market heads south soon, according to Ernest Ankrim, Russell’s chief investment strategist.

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It’s been a groundbreaking year for investing in China, said Kirk Shinkle in U.S. News & World Report. PetroChina became the first $1 trillion company, and the Shanghai stock index soared. It’s “a bubble, to be sure, but one with some amazing long-term potential.” Consider the demographics: “China is home to 1.3 billion people who provided its economy a low-cost workforce that is quickly becoming an army of consumers.” The downsides? Eventually, workers will demand higher wages, and its banking system will need reform. “China also needs to curb the worst offenses that have accompanied its rise, including environmental damage and a blind eye turned to infringement on patent and intellectual-property rights.” Looking for a piece of the action? Consider travel giant Ctrip.com and digital advertising “powerhouse” Focus Media—both listed on American exchanges. Considering the country’s “amazing long-term potential,” some risks are worth taking.