Managing profits is just as important as managing losses. But there are no profits if the money isn’t in the bank. Therefore, it’s advisable to evaluate your positions in regular intervals and adjust portfolios to fit your unique growth and risk characteristics.

In addition, in a global economic environment in which the US and European economies continue to weaken and food inflation in emerging markets remains a problem, stock selection is of paramount importance.

For Asia, both May and June have traditionally been weak months. On the other hand, staying away from the market from May until the end of August hasn’t been very rewarding either. During these months, bargains arise and portfolios can be positioned for the customarily stronger periods in Asian markets, namely late September through late January.

Currently, things are a little more complicated because investors still aren’t overwhelmingly bullish, and a lot of them stayed on the sidelines during the two-month global rally in equities. And because the global economic fundamentals are weak, the bears continue to outnumber the bulls.

China in particular has been on the receiving end of a lot of bad publicity on the economic and financial fronts. The prevailing argument is that the slowdown in the developed economies will severely damaged China’s economic growth. But this isn’t the whole story.

Exports remain an important part of China’s economy, but domestic investment and consumption are the main growth engines. (Retail sales growth in April was up 22 percent year-over-year.) And on the export front, China has seen strong growth from Africa, the Middle East and South America as resources-producing economies use commodities gains to revitalize their economies.

The ultimate reason for investing in Asia is the gradual transformation of its economies from simple goods manufacturers and exporters to true domestic demand-led economies. This transition will obviously take some time to play out and won’t come to a head for every economy simultaneously, but the progression seems to be irreversible.

As we enter the tricky summer months, you should concentrate on companies that have relatively strong pricing power, strong balance sheets and a decent, sustainable dividend yield.

Below I suggest five companies from the Silk portfolios that fit the aforementioned parameters and display strong growth characteristics. Notice that these five refer to Asia excluding Japan. (See Silk, 30 April 2008, It’s a Rising Sun.)

Russia is still my favorite market. (See Silk, 19 Dec. 2007, Russia: Top 2008 Market.) Follow the Fresh Money Buys below to allocate your money into Silk-recommended stocks.

Portfolio holding Russian oil giant Lukoil (OTC: LUKOY) issued a press release stating that its CEO, Vagit Alekperov, increased his stake in the company to 20.4 percent. The last time Alekperov bought the company’s shares was in July 2007 with 19.06 percent under his control. It’s always considered big news when management buys more shares in the company. Lukoil remains a buy.

China Mobile (NYSE: CHL, Hong Kong: 941) is one of the largest mobile service providers in the world and has a subscriber base of more than 370 million. It operates mobile telecommunication services in 31 provinces and municipalities in China. The company added 7.97 million new subscribers in February, up 63 percent year-over-year.

In today’s market environment, China Mobile’s high earnings visibility and skilled management are great qualities that distinguish it. Furthermore, the company’s potential in the area is huge: The nationwide penetration rate is around 40 percent and is growing rapidly. In rural areas, in particular, which are becoming the government’s economic priority, the penetration rate is around 19 percent.

I expect this will be the company’s next growth driver because the central government has been committed to increasing the rural standard of living. Buy China Mobile.

Cheung Kong (Hong Kong: 1, OTC: CHEUY) is one of the biggest conglomerates in Asia and the barometer of the Hong Kong stock market; its main business is real estate. With its 49.9 percent ownership holdings in Hutchison Whampoa, the company’s business has  expanded to include ports and related services, telecommunications, and energy and infrastructure.

The company’s 19.3 million-square-foot land bank in Hong Kong is the largest among developers and should continue to benefit from the country’s real estate revival. In China, the company owns 113.5 million square feet of land, and the expectation is that the revenue contribution from China will continue to rise for the next three years.

The company has a very strong balance sheet with low debt levels (net debt to equity is 16 percent) and still trades at a discount to a lot of its peers. Buy Cheung Kong.

Standing alone, Taiwan may not be the most exiting investment story around. But in conjunction with China and the benefits the economy will reap from a more reasonable coexistence with the mainland, iShares MSCI Taiwan’s (NYSE: EWT) potential is huge.

Taiwan isn’t in a position to survive economically without China’s assistance or as public and governing elite finally realize that economic development is taking precedent over extreme nationalistic policies. As a result, China will gradually increase its investment in the island, sparking its economy as it did with Hong Kong 20 years ago. Buy iShares MSCI Taiwan.

Singapore Telecom (OTC: SGAPY) has a steady, profitable domestic business, but it offers a backdoor entrance to India’s lucrative, explosive telecommunication market. The company owns a 20 percent stake in India’s fastest-growing telecom company, Bharti Group.

That stake contributes to a big part of Singapore Telecom’s profit growth, as well as its operations in Indonesia. The company also does business in Australia, Bangladesh, the Philippines and other Asia-Pacific countries.

It offers a 5.3 percent dividend yield, which should gradually increase because of management’s payout focus. Buy Singapore Telecom.

Bank of China Hong Kong (Hong Kong: 2388, OTC: BHKLY, BoCHK) is the second-largest bank in Hong Kong in terms of deposits and loans. It has a customer base of around 2.5 million retail customers (around 40 percent of Hong Kong’s population). In China, BoCHK operates 14 branches and can make use of its parent’s 13,000 branches to serve the rising consumer demand for cross-border banking services.

BoCHK remains one of my favorite banks in Asia and should fair relatively well even during a weak market, while offering upside through its exposure in the revived Hong Kong real estate market and China’s banking expansion. The bank also offers a solid 4.3 percent dividend yield. Buy Bank of China Hong Kong.

I recommend shorting HSBC Holdings (NYSE: HBC). I made this recommendation before, but it didn’t play out well for us. The argument is the same this time around: HSBC holds 63 percent of its loans in the US and UK, and its stock hasn’t suffered nearly as much as the rest of the global banks.

I still expect it to be hit in a downturn, and it’s a good hedge to our long positions. Short HSBC Holdings at current prices, and place your stop at USD100.

The investment process is constant. So if you’d like to add to your positions in portfolio recommendations or allocate new funds in a diversified way, focus on the following markets, in order (for both countries and sectors). Consult the Portfolio tables for details.

• Russia (energy, telecommunications)
• Hong Kong (banking, real estate, infrastructure)
• India (pharmaceuticals)
• Philippines (telecommunications, real estate)
• Singapore (banking, telecommunications, industrial)
• China (consumer, telecommunications, machinery, oil, e-commerce, coal)
• Japan (banking)
• Taiwan (ETF)
• South Korea (banking)
• Cambodia (casino/hotels)
• Macau (casino/hotels)