Hong Kong’s Hang Seng Index went from bear to bull in just over three months. What stock investors need to know now
- Excitement is building about the city’s stock market: money is pouring in; 24 companies plan to list this month
- Red hot new economy stocks could be heading for a correction, analysts warn
Well, that was fast. Bulls wrested control from the bears in Hong Kong just three months after the Black Swan coronavirus sent the Hang Seng Index tumbling and unnerved investors.
Fear of missing out has elbowed aside the fear of being in the market. Now what?
Hong Kong and emerging markets are at the start of a very powerful – and long – bull market, argues Mark Galasiewski, Asian-Pacific financial forecast editor at Elliott Wave, who studies historical charts and other technical tools to predict market movements.
“It will continue to surprise most observers with its persistence and duration because that’s what powerful bull markets do,” he said, contending that this bull market “will continue for many years.”
But Richard Peterson, a behavioural economist and author of Inside the Investor’s Brain, warns investors to watch out for the positive sentiment driving bull markets to shift from rational optimism to the irrational exuberance stage that creates market bubbles – and breaks investors’ hearts.
“Investors who trade now should understand that it is likely to end in tears for most of them,” Peterson says.
