Author(s)

Hailu Mao

Corresponding Author

Hailu Mao

ABSTRACT

The past three-year period has witnessed a COVID-19 health crisis, which has also affected Chinese economic development, leading to the downturn of Chinese stock markets. This has changed public attitudes towards risks in investment, accompanied by investors’ shift in different kinds of assets, among which are the alternative assets. This paper manages to construct investment portfolios under the COVID-19 crisis with Chinese traditional stock markets and particular alternative assets -real estate, gold, and bitcoin - testing whether and how these alternative assets are worthy to be included in the investment portfolio for different purposes. Using Markowitz’s Mean-Variance model and a series of standardized analyses, it has been found that the Chinese stock market and real estate market experienced a downturn from the beginning of the COVID-19 in the short run. The price of gold and bitcoin have relatively small correlations with other indexes as a hedge for investment portfolios, and bitcoin far outweigh other assets for its higher returns and Sharpe Ratio during the pandemic. A possible explanation of COVID-19 impacts on Bitcoin has also been proposed. It is suggested that investors could take a wait-and-see attitude toward the Chinese traditional stock market and real estate market, while Bitcoin deserves prudent investment in this stressful period.

KEYWORDS

Alternative assets, Stock market, COVID-19 impacts, Gold, Bitcoin, Real estate