Richard Dommer

The Current Rally Should Continue Until Retail Investors Are Sucked In

excerpt from above linked story ...

The participation of domestic retail investors in the Chinese equity market has gone through the roof. The total number of domestic individual equity accounts was 94 million, or over 7% of population, as of April 30, according to Goldman Sachs. In contrast, only 5% of the population had equity accounts in 2001.

"Moreover, new account opening is accelerating at a lightning pace--new individual account openings on April 30 alone exceeded 1 million, and total new individual account openings in April exceeded the sum of [those opened in] 2005 and 2006," said Goldman Sachs economist Hong Liang in a separate research report Thursday. "As a result, about 17% of the total existing accounts were opened just in the past 4 months."

The Current Rally Should Continue Until Retail Investors Are Sucked In

The US retail investor may not be at the punch bowl with cups in both hands but there appears to be a pretty big party going on in China. Could this pose a risk for the US equity markets?

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