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Franklin Templeton's Greater China head, David Chang shares his views on how Asians invest:

'WSJ: What are some key characteristics of investors in Asia?

Mr. Chang: The investment horizon for Asian investors is relatively short, despite the fact that mutual funds are for long-term investment. A lot of education has to be done going forward. One major characteristic of investors in my region, even Asia in general, is the "one or the other" mentality. Ten years ago it was only about equities. Right before the financial crisis, investors became more risk-averse and switched into fixed-income, and we enjoyed that change of trend as we had some very good fixed-income products.

We caught that tide for the next two years. People got burned during the financial crisis so they swung into fixed-income, despite the fact that we keep saying you need to diversify your portfolio and do your asset allocation. The swing was quite obvious for investors in Hong Kong and Taiwan.

WSJ: How have investment attitudes here changed since the financial crisis?

Mr. Chang: I think investors in Asia are still being very cautious, a lot are still staying with fixed-income funds. We saw a slight improvement in the past 12 months or so, but I wouldn't say it's significant. The only thing we're seeing is that investors are getting into income-oriented products, not just fixed-income. They want to see stable dividend-paying products as well.'

What he forgot to mention is how short term oriented the financial industry in Asia is too. I've yet to come across an analyst/ broker/ wealth manager who actually expects people to *invest* rather than trade. They even have so-called 'Trading Buy' recs!

Good ole chicken 'n egg all over again!
GG/MDP Home Fool
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