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Many Hong Kong investors have been in this position recently. However, before panicking, it’s crucial to plan your next steps. If you follow these steps during a stock market crash, you can still make the best possible decisions for yourself and your investments. We trust this information will help you weather this storm.
Reasons your stock might crash in Hong Kong
First, let’s explore some reasons why stocks may be crashing in Hong Kong:
With Brexit, the UK has voted to leave the European Union (EU). This vote means that many companies in the UK and trading within the EU will now lose their trading rights. It also means they’ll need to rebrand and establish themselves as separate companies.
Losing these major trading rights will reduce the value of businesses’ shares, making it more difficult for them to succeed and make a profit. As well as this, investors are concerned about their stocks being traded less, causing them to lose value.
2. Weakness in the Chinese economy
China’s economy is currently slowing down. This means that people are spending less money and fewer jobs available, resulting in fewer products being bought. As well as this, the Chinese currency has become less valuable, making Chinese exports more expensive.
Hong Kong relies on mainland China for many of its businesses, especially those related to clothing, fashion and technology, so they’ll be hit hard by a struggling or failing Chinese economy.
What to do when your stock crashes?
If you are a Hong Kong investor and your stock is crashing, there are a few things you can do to minimise your losses.
1. Stay calm
This is the most significant piece of advice we can offer. When stocks are dropping, it’s easy to get swept up in the hysteria and start selling off your assets at a loss. Remember, if you sell when the prices are low, you’re likely to lose more money in the long run. Try to keep a level head and only make decisions when you’re calm and have had time to think things through.
2. Do your research
Before making any decisions, it’s essential to understand what’s causing the stock market to crash and how it will affect your investments. Once you know what’s going on, you can start making informed choices about what to do next.
3. Sell some assets, buy others
If you’re feeling particularly uncertain about the stock market, it might be a good idea to sell some assets and buy others. This will help to rebalance your portfolio and reduce your risk if things continue to go downhill.
4. Hold off on big decisions
It might not be the best time to make big decisions such as selling your business, quitting your job or moving house. If possible, try to put these off until the stock market stabilises.
5. Keep an eye on the news
The news is a great way to stay updated on what’s happening in the stock market and how it might affect your investments. Make sure to read articles from reliable sources so that you can make informed decisions about what to do with your investments.
Investing in the stock market is risky, and it can be hard to know what to do if your investment is crashing. It is important to keep informed about the market conditions and invest in other assets if the stock market drops. If you find no way to recover your stocks, you might want to sell before they lose even more value.
Talking to a financial advisor can help make decisions clearer for investors who are unsure what steps to take. Saxo Bank offers the lowest commissions and excellent customer service; visit their website here and start trading on a demo account before investing your own money.