Hong Kong investors harbor unrealistic expectations of return from their stock market investments, a financial management expert said, after a recent survey showed that the average annual return expectation in the city is 20.4 percent.
Such expectations signal irrational investment behavior resulting from risk-appetite mismatch and over-expectation, Convoy Financial Holdings Ltd. (01019.HK) chief executive Mark Mak Kwong-yiu told the Hong Kong Economic Journal.
On average, Hong Kong investors are willing to lose in one go an amount equivalent to 4.4 times their monthly salary, according to a survey commissioned by Convoy Financial.
The survey, conducted by the Public Opinion Program of the University of Hong Kong from June 3 to 12, showed that 40 percent of the 1,001 respondents were engaged in investing. Their ages ranged from 18 to 65.
About half of those who invest never cut their losses, the survey showed.
About 10.9 percent were classified under the category of having tolerance to high risk, while 85.6 percent were tolerant to medium-level risk or below.
On average, the respondents were willing to park 23 percent of their monthly income in investments, while 82.7 percent preferred equities.
Only 8.4 percent sought advice from financial management consultants, indicating that most of the individual investors were likely to be swayed by herd behavior.
– Contact us at [email protected]