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Monitor | Attempts to diversify China's reserves have been a disaster

Plain old US Treasuries would have been a respectable earner for forex agency, before its stock pickers over-reached with some big-ticket flops

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Attempts to diversify China's reserves have been a disaster

American asset prices have been enjoying a ripsnorting rally lately.

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Over the last six months the S&P500 stock index has climbed 20 per cent. Alternative assets like hedge funds are generating decent returns. Even house prices are up.

With liquidity plentiful, and valuations modest by historical standards, most investors expect the bull run to continue.

But for market watchers who like to keep an eye out for contrarian indicators, there is one incidental sign that the current trend may soon be nearing its peak.

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According to yesterday's edition of , China's State Administration of Foreign Exchange has opened a New York office to diversify its investments into unconventional asset classes.

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