Wang Jianqing, a 34-year-old editor, said she likes using an electronic stock billboard as her computer screen saver.

"Every morning when I switch on my computer, I can see the trend line of the major index immediately," she told Yu Nan, the general manager of the Beijing subsidiary of the China International Fund Management Co Ltd.

Unfortunately, Wang's investments in stocks and mutual funds are not looking as good as the soaring index.

A woman examines the various investment products offered by a bank in Beijing. (photo: China Daily)

"Let me tell you what to do; take your eyes completely off the screen," Yu told Wang.

"You care too much about the market's short-term ups and downs," she said "And this is stopping you making a reasonable return."

Yu was advising Wang not as a friend but as the keynote speaker at the inaugural investor education lecture organized by China Merchants Bank (CMB) and held last month in downtown Beijing Financial Street.

Yu's lecture offered tips on how to invest in stocks and mutual funds. She said that although a large number of funds had doubled in value over the past 12 months, many investors had failed to make any money.

"That is because they change their portfolios too frequently," she said.

With stock-mania sweeping the nation, CMB said it plans to hold up to 300 lectures in 43 cities to help investors make money from the bull-run and also warn them of the risks.

The lectures will be held in local communities, factories and even or schools, Wang Xiaoling, a spokeswoman for CMB's Beijing office told China Daily.

She said the bank had invited a number of well-known economists, senior analysts and fund managers to give the lectures, each of which will be free of charge to the public.

On October 16, the Shanghai Composite Index, the major index of the A-share market, broke through the 6000-point barrier. By last Friday it had fellen 4.85 percent to 5330.02, raising concerns a major correction could be just around the corner.

Also, macroeconomic tightening policies added uncertainties to the mainland stock market.

The securities regulator has said it will allow more funds to invest overseas through the qualified domestic institutional investors (QDII) program. The government's determination to channel more money away from the mainland has also worried A-share investors.

"In my view, the A share is still in a bull-run period, backed by a strong economy and the appreciation of the value of the yuan," Yu said.

"But there will be more ups and downs in the market."

"That's why educating investors is of the utmost importance. I am always telling people to ignore the market's short-term ups and downs."

Yu said individual investors should stop trying to follow every detail of the market, and instead let professionals manage their investments.

Of course, fund mangers and wealth management consultants have also profited from the booming stock market.

Tian Hui is a certified financial planner (CFP) with the Chongqing branch of the Industrial and Commercial Bank of China (ICBC). Over the past two years she has advised more than 4,000 clients.

In that time, her investors have seen the value of their mutual funds increase by as much as 321 percent.

The ICBC currently has 598 CFPs across the country, and the number is growing fast, the bank told China Daily.

Jiao Yang, who also attended the first CMB investor education lecture, is an account manager for CMB's VIP clients.

Individual investors should learn to diversify their investment portfolios in order to minimize risk. In this way, QDII funds are a good choice," Jiao said.

Four new QDII funds were launched last month and their $4 billion quotas were each fully subscribed on the first day, with less than half the total subscribers getting lucky.

Following the central bank's drive to balance money and stocks in the domestic market, eight fund houses have been granted QDII licenses to invest overseas. In contrast, no new funds investing in the domestic market have been allowed since September 5.

But with the A-share market robust and the yuan still appreciating, some local investors are in no rush to move their money overseas.

Bu Yu said they should be.

"Many investors think the local A share has been the world's fastest growing stock market since 2006. They are wrong.

"The markets in Peru, Venezuela and Vietnam have all outrun the A-share market," she said.

"It is time for Chinese investors to look overseas."

Figures from the Shanghai Stock Exchange show the average P/E (price to equity) ratio of Shanghai A shares was 60 times in September, much higher than the average 15 times on overseas markets.

In a bid to help people develop an educated and right-thinking investment attitude, the China Securities Regulatory Commission (CSRC) and the Securities Association of China have been working with several major media.

"For example, we worked with CCTV on a program called 'Three-Person Talks on Funds and Stocks' to guide investors in investing," Liu Fuhua, a spokesman for the CSRC told China Daily.

Also, Shang Fulin, chairman of the CSRC, said at a meeting on investor education in September that investors should forget the idea they can become millionaires overnight.

"Investors must realize that they are responsible for the risks they take," he said.

Investor education is a long-term, systematic task that must be undertaken with persistence and perseverance, Shang said.

"Regulators and dealers should help investors raise their risk awareness and clamp down on market irregularities," he said.

The securities watchdog received 1,638 complaints about various securities operations in the first half of this year, and investigated 524 of them, according to figures from the CSRC.

The stock market boom has seen the arrival of a large number of self-styled stock gurus and "informal" fund managers, many of whom are simply looking to cheat people out of their money.

Many such operators have turned to the Internet and are using websites, blogs and instant messaging systems to offer stock "tips" for a price to unwary investors.

(China Daily November 12, 2007)