CRI听力:How to Invest in 2012

As China's CPI hit a record high in 2011 with a 5.4 percent rise, more and more Chinese families started to pull their deposits out of the bank and put them into financial investments so as to avoid further devaluing. But how are they doing now?

"I invested in stock, the value bottomed in the second half of last year. I suffered severe losses."

"I invested to stock and funds. And it didn't go well."

Chen Xiaoli is the vice secretary general of the Financial Planners Association of China. She says that financial investments for Chinese families are mainly in stocks, funds, precious metals like gold and bank financial products. And most people suffered losses in the stock market last year.

"Looking at last year's statistics, 30 percent of Chinese families that invested in stocks saw their share value decrease over 50 percent. This has triggered a decrease in stock funds. The average rate of decrease reached over 35 percent. Those who invested in stock funds could have lost as much as stock investors."

Despite this, Chen Xiaoli says funds in general are still more stable than stock. There are other kinds of funds that families can choose besides stock funds. Bond funds and currency funds are good choices, since capital is guaranteed in these funds. The rates of return on these funds stayed steadily around 3.5 percent last year. It's quite impressive compared with the negative yield on stock funds.

However, the kind of investment that Chen Xiaoli recommends the most is in precious metals.

"Precious metals market performed well last year. Due to various factors, the price of gold reached 1700 US dollars per ounce, a rather high point through recent years. We expect the price will keep rising and the price will reach over 2000 US dollars per ounce."

Nevertheless, she emphasizes that people should always bear in mind that all kinds of investments have potential risks. And it's never easy for ordinary families to prevent risks.

"There are too many factors affecting how the financial market runs. For example, the development of a hypostatic economy, China's economic policies and the world economic policies. It's a great challenge for ordinary people to understand economic laws and get the right direction of investment. It's wise for people to possess some knowledge of economics before investing."

Chen Xiaoli also suggests that people should really be clear of their risk-bearing capacity before investing. Since many have suffered huge losses from last years investments, the wise choice this year is to act conservatively. Capital preservation funds and bank financial products are safer than going into the stock market. And always remember that there is no safer investment than keeping your cash in the bank.

For CRI, I'm Wang Wei.