Analysis of the Irrational Investment and the Cliff-like Slump in the Chinese Stock Market

In the twenty years of the Chinese stock market, a predominant phenomenon seen in an investor without exception, whether he is an institutional investor or just an individual medium-small investor, is irrational investment. The state policy plays a decisive role which can help produce a rise or a fall in the market. The investors have regarded it a golden rule whether a stock has a story or not in their selection of stocks; the shallow bid is to their greatest liking for its price might skyrocket. The irrational investment on the part of the Chinese stockholders will unavoidably bring forth a steep rise or slump in the market, which also sheds some enlightenment for making decision in dealing with the trade.