Top Biz News
Rise of new generation of investors
By Li Xiang and Jiao Xiaoyang (China Daily)
Updated: 2010-01-18 08:03
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The growth in China's stock market is not just about the upgrade of tools but also investors' techniques and mentality. [China Daily] |
As China's capital market continues to improve, Chinese investors are becoming more sophisticated in stock trading. Investing in the stock market has also become an increasingly important way for Chinese people to manage their assets.
About 61 percent of retail investors made profits in 2009 while 6.2 percent profited more than 100 percent, the survey by Horise.com showed. Nearly 63 percent of investors said they would do research and analysis of a listed company before buying stock.
But the future could be more challenging to individual investors after the regulator earlier this month approved margin trading and stock-index futures, making trading in the Chinese market an even more sophisticated game.
"The long-term trend of the market would be more stable but short-term volatility will likely be much higher with two-way trading activities," said Xin Yu of Aviation Securities.
"Therefore, it requires pretty skilful trading techniques and a healthy psychological status for retail investors to ride the long-term growth of the market. But if you are too hasty and over trade, it's very easy to get your fingers burnt."
Zhang Jianli, a 64-year-old investor from Beijing, has played the stock market for 14 years. He once lost his entire assets but did manage to survive.
"Whether you are from the school of technical analysis or fundamental analysis, you have to keep in mind that the market is always right and investors are those who make mistakes," Zhang said. "So never fight the market. One needs to be flexible in order to survive."
For some investors, the market is a place where only hardworking investors can survive.
"Losers are lazy people in the market. To survive in the market, one has to be a hard-learning investor," said Li Xin, a 34-year-old stock trader in Beijing. Li said he often spent about three hours a day studying price charts, patterns and indicators of the market to help him make the right decisions.
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"Uncertainties still exist in the market and the PE ratios of many stocks are too high," he said. "It is possible that China's fast recovery from the financial crisis will lead to a new round of inflation."
But the high school teenager said his passion for the financial market would continue to grow. He has decided to major in finance at college and gain some work experience in investment banks after graduating. Liang said his ultimate goal is to run his own fund management company in the future like Buffett's Berkshire Hathaway.
"My passion for the financial market is a natural and innate thing. It's like Pavarotti loved singing and Bill Gates loves computers," he said. "The interesting relationship between time and capital always fascinates me."
