My mother is probably not the only pensioner addicted to mutual funds.
She called me last week to say she was going to buy more, placing her trust in those professional money managers who invest in aggressive-growth stocks. This newfound faith came on the heels of handsome returns over the past year.
"Are you aware that the higher the reward, the greater the risk?" I asked, uneasy about her investing more of her savings in the volatile domestic market.
"I don't think the Chinese stock market will fluctuate too much before the Beijing Olympic Games next August. I'll get out sometime when it's over," she said.
Others have a similar plan. Many small investors and analysts share the view that the Chinese economy will run out of steam and maybe even hit a slump when the Olympic Games finishes. Such concerns have already prompted people to delay buying homes in Beijing.
But one local economist has grabbed the media's full attention by boldly claiming that the Chinese economy will remain strong after the Beijing Olympics.
In recent interviews and articles, Professor Li Yining has said that China's economy will keep growing at a rate of 7-8 percent or higher for another 15-20 years, supported by strong domestic demand.
After the Games, huge investment will be needed to rejuvenate the old industrial base in northeast China and the country's underdeveloped west. High-tech industries will also attract new investment. Growth areas such as new energy resources, biotechnology, new materials and new generations of electronic products will also draw huge sums of money.
Li is also staking his reputation on belief that strong demand will build jobs and help regulate the unemployment rate after the Games.
But there may be a murky flipside to such optimism.
Former US President Harry Truman once said he wanted to find a one-armed economist, because when he asked his economists for advice, they always answered, "On the one hand, On the other hand, "
As a noted economist and top economic policy adviser, Li has clearly outlined an optimistic economic outlook after the Olympic Games. His counter-arguments tend to be much shorter and more subtle.
He said China should overcome five major barriers to achieve sustained growth, including breaking up monopolies, adopting a more pro-business government role, increasing farmers' incomes, easing resource shortages and better supervising environmental work.
These prescriptive statements, which Li now describes as necessary pre-conditions for a robust post-Olympic economy, did not appear when his ideas were first published.
Although Li has long championed the reform of China's stock market, he has not touched on the subject in recent remarks on the post-Olympic economy.
The problem is that when economies post strong growth, stockholders become more optimistic and expect higher corporate profits in the future, triggering a rise in stock prices.
It remains to be seen how Li's predictions will help dissipate the fear about a post-Games slowdown.
In the meantime, I hope that small investors like my mother plan on making long-term stock investments. It's not easy to coincide your stock market transactions with the curving market.
Unless you have a crystal ball, that is.
