Mainland investors prefer real estate and foreign investors seem to prefer A50 (2823)
Some mainland investors had a bitter experience when the Shanghai Composite Index dropped from a peak of 6,124 points in 2007 to a low of 1,665 a year later.

The benchmark rebounded to 3,477 in July last year, but recently it has been hovering around 2,500 points.

Mainland investors prefer real estate. Even though they bought property at its peak in 2007, they can still reap handsome profits if they sell today.

Foreign investors seem to prefer A50 (2823) - a tracker fund which closely traces Shanghai stock indexes. A50's net asset value rose 10 percent recently - its highest in 18 months. Since January the Shanghai index has fallen 24 percent while A50 shed 19 percent.

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In September 2008, the premium on A50 rose to 18 percent. At the end of October, the Shanghai Composite hit bottom and then gained 108 percent in nine months.

Will history repeat itself?

If you believe foreign investors are on the right path, you may consider buying A50 units. Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views expressed in this column.