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A highly volatile stock market is detrimental to the property market

Damon Ho

In late September, the central government announced a series of policies to rescue the stock market, The Hang Seng Index rose 4300 points, from 19000 points to 23300 points. This Monday, the first day after the National Day holiday in China, Hang Seng fell 2,172 points in single trading day. In this critical moment, Cheung Kong declared that they would cut the selling prices of Blue coast Phase two by 2 percent. Cheong Kong, as a leading property developer, its sales tactics are truly a reflection of their negative outlook for the property market.

The central government actively intervened in the stock market, causing the ripple effect across the industry. Reviewing the index's movement afterwards, any investor might easily make a great fortune in the security market. In reality, most of the general investors are only market followers, and they do always react after the first mover. Moreover, most of them began to purchase the securities before the National Day Holiday.

 Consequently, they suffered losses once the market opened to trade after the holiday. Since Wednesday, it has been rising  slightly. During this turbulent day, investors anticipated that the central government would introduce additional policies to boost the securities market in this Saturday's press conference. If it is true, investors predicted that the stock market will rise again in the next Monday in China and Hong Kong.

Currently, the stock market depends on the news to boost the prices. The market is frequently up-and-down. In this scenario, the stock market becomes a casino, the win and loss are a matter of luck. Due to this market nature, only a small amount of investment is appropriate. So, it is not feasible to earn a hefty sum of money in this volatile market. If you choose to invest heavily in this market, it is equivalent to gambling in Macau casinos. The failure rate is always higher. This lousy market cannot boost the economy and stimulate the property market to develop healthily.

If there is a good news from the central government, we should not be too enthusiastic. In this market situation, the Hang Seng index will rise by a few days. As a general investor, a small amount of speculative investment is acceptable, but big bets in this market are similar to play the Russian roulette. For the property market, the long-term downturn trend is slowly evolving. If anyone is still optimistic to anticipate the revival of property market in the near future, it is evident that it is not based on the facts.

 
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