Despite big declines in China's stock market on Wednesday, market pros say the region remains a solid long-term investment.
Securities regulators in China raised the tax on equities trading on Wednesday, increasing the rate of the "stamp tax" on stock trading to 0.3% from 0.1%, the Beijing's official news agency said. The move prompted a 6.5% decline in the Shanghai Composite Index.
The Chinese hike in the stamp duty, which is imposed on both sellers and buyers, follows repeated warnings from securities regulators regarding stock trading risks.
Rob Lutts, chief investment officer and founder of Cabot Money Management, told CNBC that Wednesday's big decline was an opportunity for U.S. investors to raise their exposure to the world's fastest growing economy.
"I think the China market is still a very sound place for people to invest," said Lutts. "You have to use a lot of discipline, you have to use your risk-management techniques, but I think it is a place that is really a substantial opportunity going forward."
"Most investors need to look at their small allocation they have to emerging economies on any big pullback like we're getting right here," he added. "They should be increasing their weightings there and I think they are going to be really pleased if they look down the road three to five years."
Cooling a Rising Market
China's central bank recently stepped up its efforts to cool its exponentially rising market on May 18 when it raised interest rates for the fourth time in 12 months, raised bank reserve requirements for the eighth time and widened the trading range on the yuan.