Dear Fellow Investor,

You probably think that I'm crazy. And I don't blame you. After watching global financial companies plunge dramatically over the past seven months, it is hard to believe that we may finally see a bottom in the financial sector.

But after these incredible sell offs, isn't it about time to see these companies turnaround? Just look at how far some of the top financial institutions have fallen since September 2008.

• AIG plummeted 94%
• Southern Financial Group lost 85%
• Citigroup plunged 84%
• Bank of America declined 78%
• HSBC Holdings fell 64%

After these devastating losses, it's no wonder that investors are still reeling and shying away from any investment opportunities in the financial sector. To me, this spells OPPORTUNITY -- especially once you consider the recent developments in the financial sector.

An Improving Financial Sector

In recent weeks, we saw some rays of light break through the dark cloud that has been hovering over global financial stocks. Three things, in particular, caught my attention and led me to believe that we're in the beginning of a long bottoming process for the financial sector.

First, Citigroup, JPMorgan Chase and Bank of America all announced that their businesses were profitable in January and February. This helped lift the cloak of worry that has hindered financial stocks since the collapse of Lehman Brothers in September.

Second, the FASB announced that it might recommend easing financial reporting rules of tough-to-sell assets. A change like this to market-to-market accounting rules would help banks bottom lines.

And third, the U.S. government finally realized that it needed to involve the private sector in order to overcome the bad debt crisis in the country. On Monday, Treasury Secretary Tim Geithner unveiled the Treasury's Department's plan to work closely with the FDIC and start lending $75 billion to $100 billion to provide leverage and guarantees for private investors.

These three developments are exactly what we have needed to restore confidence and boost the U.S. banking system. That's because the Treasury's plan coupled with the Fed's quantitative easing, the FASB's willingness to modify mark-to-market accounting and the SEC's consideration to bring back the "uptick rule" on shorting, may finally break the deadly downward spiral in financial assets.

Another Way to Profit

The turnaround in financial stocks is going to be a global event -- we're going to see financial companies around the world benefit. And that's why I've been recommending some short-term trades in my Asia Edge service to take advantage of this trend, as well. In fact, I recently recommended a Chilean bank that is not only benefiting from the recovery of the financial sector but also the strength of the Chilean economy and stock market this year. Chile's stock market is up nearly 9% year-to-date. I'm expecting double-digit gains in this Chilean bank in the next six to 12 months. Don't miss out on this move higher, join Asia Edge today!

Based on this, I am even more confident now that the banking industry is building a bottom and on the verge of a turnaround. And that makes me more optimistic about the future of global stocks.

How to Profit

Since China is still going to be one of the few nations in the world to show strength this year and be the first economy to turnaround, I think that we should continue to pick up investments there. And to take advantage of the rebound in financial stocks, I currently have three recommendations on my China Strategy buy list.

These three companies are benefiting from the strength of the Shanghai Stock Market -- up 28% year to date -- the strong liquidity in the Chinese financial system and the recovering financial sector. All three have the potential to post double-digit gains this year!

That's a move that I don't want you to miss out on. So I'm going to provide you with a sneak peak at my top three financial plays right now.

Top Pick #1:

One of the Largest Banking and Financial Services Firms in the World: In the April issue of China Strategy-- which was posted online this week -- I recommended a financial company that has remained vigilant in overcoming the current financial situation, and as a result, it hasn't needed government bail outs. And in an environment when most of its competitors are being nationalized or filing for bankruptcy, this financial institution stands to gain as the global economy stabilizes since it is well capitalized, liquid, and most important, profitable. I'm expecting a 40% gain in six to 12 months.

Top Pick #2:

China's Leading Insurance Provider: This company not only has a monopoly in the world's fastest-growing life insurance markets -- China -- it is also benefiting greatly from the Chinese government's efforts to revive the economy. As one of China's leading financial institutions, this insurance company is also a beneficiary of the strong liquidity in the Chinese financial system. In March alone, this company's shares have jumped 27% higher.

Top Pick #3

A Major Chinese ETF: With the Chinese government's $586 billion stimulus plan, Chinese banks are pumping money into the financial system. All of this liquidity has been driving up the local Shanghai stock market, making it the top performing stock market in the world. And that's been benefiting this Chinese ETF since it tracks the Chinese A-Share market. Year to date, this ETF is up a whopping 44%!

You still have time to profit from my top three picks, so don't worry about the gains you've missed. But you need to act soon before the stock prices rise above my recommended entry points and you miss the boat all together. My complete buy advice and risk-free trial subscription to China Strategy await you.

Sincerely,

Robert Hsu