Reuters reports that Chinese investors are heavily involved and influenced by online chatrooms for their investment decisions. According to the article, the Chinese market is heavy with activity from individual investors rather than brokers (typically more professional of the two). The Chinese are looking to the chatrooms for news, tips and camaraderie and use the info they get to make their investment decisions.
Not to be a doom and gloom predictor but I'm going to watch my investments closely in the near term. Here's why:
- The Chinese are notoriously risky gamblers (I can say this because my family is Chinese and because the French already noted the "the casino mentality in Shanghai")
- Internet chatter is an unregulated free for all, prone to ignoring facts and moving purely on opinion and the loudest voices (or ideas)
- The Chinese market is already inflated (Greenspan's statements)
- We live in a global economy, influenced by the shifts of international markets
- When the Chinese bubble bursts, it may be the event that causes our market to finally turn around from our record highs.