Retail Investors Undermining China Market
Like it or not sentiment remains a key driver of investment dynamics.
This week's plunge in the China financial markets is highlighted by the predominance of retail investors.
It's been estimated in the financial press that up to eighty per cent investors in Chinese equities are retail versus institutional.
Welcome to the casino-like marketplace where day traders have seen fortunes soar but now are sinking like dead seagulls.
Volatility is a natural when smaller players dominate a sector and this is clearly the case in China's present conundrum.
In Thailand, the bum rush for cheap and small condominiums as short term investment has become the norm over the past six years.
While the real estate dynamics are not exactly similar to the financial markets, a similar train of thought by investors is rampant where a get rich quick process has become the mantra.
As Asia looks set to cool off, perhaps it's not entirely a bad thing to see a return to normal long term thinking for stabilized assets such as property