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New investors in China don't know market: survey

As Chinese stocks soar to records and new buyers pile into the market, a survey has confirmed a troubling reality: Few investors really understand how stock markets work.

ChinaHR.com, a Web-based job placement firm, said that of the 2,500 responses this month to one of its surveys, more than 90 percent said friends or relatives had invested in the market and 46 percent said they had opened their own trading accounts.

But just 10 percent said they had a firm grasp of the market, while 56 percent said they were learning as they went, the poll showed.

It did not account for the remaining 34 percent.

The survey was published on Monday on ChinaHR.com's Web site.

ChinaHR.com called the finding "worrisome."

No margin of error was given and it wasn't clear whether the company had verified each response as unique.

Polls measuring investment knowledge are rare in China, and while the results may not be scientific by Western standards, they provide a glimpse into the stock market fervor that has lifted the benchmark Shanghai Composite Index more than 50 percent this year after surging 130 percent last year.

A growing number of individual investors, faced with few investment options and low bank interest rates, have been shifting their nest eggs out of bank accounts and into the stock market. There were some 8.56 million new equity accounts opened in the first quarter of this year in China, compared with 5.38 million for all of last year, according to Brown Brothers Harriman, a New York-based investment firm.

"Stock market investment is like career development -- it's a long-distance race," ChinaHR.com researcher Zhou Yuan said.
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