Stocks News
- Most investors have no clue how market works
Date: 23-May-2007 Sources: (Xinhua Online)
An overwhelming percentage of investors trying to cash in on the country's bullish stock markets have little to no clue about how the market works, a recent survey suggests.
ChinaHR.com, a Web-based headhunting company, surveyed more than 2,500 office workers in more than 20 business sectors over the Internet about their attitudes toward stock investment amid the recent market boom.
More than 90 percent of respondents said their relatives and friends are playing the stock market, while 46 percent said they had opened their own trading accounts.
Only 19 percent of the investors said they had a strong understanding of the stock market, however. A full 56 percent admitted they are new to the market and only possess superficial investment knowledge.
About 25 percent of those with stock accounts said they have no idea how the market works, the survey reported.
'I cannot understand those charts, financial reports and technical terms at all,' said Jiang Jiezhou, an office worker who began buying stocks last month. 'What I will do is to follow my friends' instructions to buy what they tell me to buy and sell when they tell me to sell.'
Zhou Yuan, a financial analyst at ChinaHR.com, said that the large number of 'unlearned' investors suggest common speculation, rather than mature investment, is pushing up the country's stock markets.
'The stock market rally in recent months left most people with the wrong impression that it is an inexhaustible gold mine, which lured many people to plunge into the market without any preparation,' Zhou said.
'But in fact, investment is a long term management process that needs enough financial knowledge and risk awareness,' he added.
The survey reported that more than 60 percent of the investors earn no more than 3,000 yuan (385 U.S. dollars) a month. Most of their investment money came from bank savings.
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