- The China stock market collapsed 40% in less than a month and Chinese authorities are keen to stop the bleeding with various measures.
- Opportunities for investors to invest in ETFs that track China indices after this crisis passes.
- Important lessons for investors to always be aware of the risks they take, do their due diligence, and not follow the crowd blindly. Know their limits and stay within their circle of competence.
Reality Hits
In my previous article, you have seen the rise and fall of the China stock market. The bubble burst when the Shanghai Composite fell 40.45% in 15 trading days. While no one can predict when the crash will happen, it was clear to institutional investors that a bubble had formed when a record number of illiterate investors were allowed to open margin trading accounts.
As the institutional investors were bailing out, deluded Chinese investors continued to ...
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