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Reactions in China, US not so different after all

Daryl Guppy
Daryl Guppy2/12/2018 08:00 AM GMT+08  • 6 min read
Reactions in China, US not so different after all
SINGAPORE (Feb 12): A funny thing happened in markets the past week. The US market, dominated by institutional and fund traders and supposedly the model of restraint and stability, staged a nerve-racking plunge.
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SINGAPORE (Feb 12): A funny thing happened in markets the past week. The US market, dominated by institutional and fund traders and supposedly the model of restraint and stability, staged a nerve-racking plunge.

The China market, dominated by mum-and-dad retail traders and supposedly a model of unrestrained volatility, did much the same, but this was a continuation of an already-retreating market.

The similarities go to the heart of our financial system. It dispels the myth that the Chinese retail-dominated market is inherently more unstable and volatile than the US one because mum-and-dad investors are more emotional than the “mature” US fund managers. Dispelling this myth is important because it allows us to evaluate the Chinese market more objectively.

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