After weeks of stock market turbulence, Hong Kong's private investors are left facing the perplexing dilemma of where to put their money. In one month, many have seen the value of their holdings shrivel by as much as half if they were heavily weighted in high-technology stocks.
The recent falls struck across the board, proving there are no safe havens, especially when the world's markets follow Wall Street's lead like poodles.
Investors elsewhere, such as the British, have a broader choice - at times like these they desert stocks for bonds, property investment and unit trusts, or the building society.
But in Hong Kong, the scope for alternative vehicles is limited.
'For retail investors in Hong Kong there is no alternative than to go to equity markets,' Celestial Asia Securities Holdings director Eugene Law Ka-kin said.
Prudent investing for the long term is not what lights the fires of Hong Kong's population, who tend to approach stocks and shares in much the same way as the second race at Happy Valley. And they are not alone.
US Federal Reserve chairman Alan Greenspan recently described the new wave of get-rich-quick merchants in his country as trading in the same way as they might place a bet in a casino.
This tendency means the unit trust and mutual fund market in Hong Kong has not developed to the same extent as that in Europe and the US, with only a 4 per cent take-up of funds here.
Hong Kong Investment Funds Association (HKIFA) figures show most Asian fund sectors, both regional and single country, attracted net inflows in February.
But the levels invested were considerably lower than inflows in January.
Excluding Hong Kong equity funds, which were badly hit by changing investor sentiment, Asia-Pacific funds attracted inflows of US$76.8 million, 37 per cent of total inflows of US$208 million.
The HKIFA said hardest hit were Hong Kong equity funds, which suffered a net outflow of US$105.3 million, with gross redemptions up 167.5 per cent to US$141.6 million, the highest ever monthly figure.
'They [units] have not been a runaway success here - Hong Kong people are still only keen on going into the stock market directly,' Tung Tai Securities' Kenny Tang Sing-hing said.
'That won't change. The return on shares is much faster than unit trusts, and liquidity is greater - you wait a day to get your money with unit trusts,' he said.
South China Brokerage vice-president Howard Gorges agrees, adding that sales of unit trusts seemed to be improving, though they were viewed as just another route into the stock market.
Mr Tang has seen no evidence of a shift towards such funds but noticed people were holding more cash to wait out the market's volatility.
There was some movement into bonds, he said, and bond funds.
Mr Gorges explained that bonds, like unit trusts, were not liquid enough to appeal to small investors.
He noted some investors were heading for overseas bond markets, which were traded in Hong Kong but based outside the SAR.
Citibank Investment Services regional head of investments Malik Sarwar said retail investors were more selective now in picking funds.
'What we have observed is that investors are taking a pick of quality funds,' Mr Sarwar said.
For those who had suffered the wrath of a volatile stock market, even property was not a viable option, analysts and strategists said.
'There's not much property speculation at the moment, the government has made it too difficult,' Mr Gorges said. Most people were choosing cash.
So, Hong Kong investors were stuck between a rock and a hard place. But Mr Gorges thought that for those prepared to take a long-term view, the stock market was still likely to outperform other investments.
History suggested that, in time, the recent white-water ride taken by markets would be seen as just a patch of choppy water.
As Pacific Chartered Fund Managers managing director Christopher Day said, the volatility was relative and recent falls in the market were not that severe.
'They have just returned to levels seen before the misplaced euphoria at the end of [last year],' he said.
One consequence of recent events could be the end of trend-following investment strategies.
'General asset allocation will re-assert itself as the key to performance,' he said.
But many analysts thought that with the introduction of the Mandatory Provident Fund this year unit trusts would become the preferred investment vehicle for retail investors.
HKIFA chairman Paul Chow Man-yiu said unit trust sales were expected to surge more than twofold by 2006, bolstered by the MPF.
Mr Chow forecast 10 per cent of the population would have invested in retail fund products five years after the December launch of the MPF, up from 4 per cent now.
'According to the experiences felt by the overseas markets, the sale of unit trusts rose substantially after countries launched compulsory retirement schemes,' he said.
Mr Gorges believed that with hindsight, a number of retail investors would be doing bottom-fishing as a buying opportunity still existed, though it might be a while before the market stabilises.