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As you may know, in Chinese culture, each year is marked by one of the creatures from the list of Chinese zodiac animals. February 10 will mark the start of the Year of the Dragon — the only mythical creature among the Zodiac animals.
The Year of the Dragon is important, as the dragon symbolizes power, strength, but most of all — luck and good fortune. While a bit of luck could do a lot to boost everyone’s morale, in Chinese culture, the Year of the Dragon could affect how people might behave in certain aspects of life, especially in the investment landscape.
What Effect Could the Dragon Have On Investors?
Most people have had moments when they felt lucky, like they just can’t lose. When such a time comes, many choose to try their hand at gambling and betting. You might be a horse racing fan, betting on football or other sports, or even participating in the state lottery.
But, if you are a fan of trading and investing, you might instead want to turn to high-risk, high-reward assets. In the context of Chinese investors, with the Year of the Dragon about to start, many may believe this is the year to take chances and go after risky assets.
In other words, this is the year when certain assets and stocks considered high-risk or connected to dragons, luck, or the color red (also a symbol of luck in China) might see greater attention. As a result, they might also see a considerable price increase. While it should be stressed that there is no guarantee that this will happen, we still believe there is a chance. With that in mind, they are worth watching closely.
Which Assets Could Be Breathing Fire This Year?
Now that we understand what the Year of the Dragon is and how and why it might affect Chinese investors, it is time to look at the assets that might be affected. The following assets were given only as examples, but it is clear that dragon and luck symbolism runs deep across various asset classes.
Cryptocurrency and Blockchain
Even in the crypto and blockchain space, there are projects that might be attractive to Chinese investors who decide they believe in the dragon effect. While Bitcoin is the most popular cryptocurrency, it has nothing to do with dragons. Dragonchain (DRGN), on the other hand, does.
This project claims to have the most secure and flexible blockchain platform on earth. It views itself as an enterprise and startup-ready platform for building flexible and scalable blockchain apps.
It was launched back in late 2017, and while it did not see a lot of popularity back then, this might change in the Year of the Dragon with the optimism that it is expected to bring. Given the project’s symbolism mixed with its business-oriented platform, Chinese investors might just decide to take a risk with it and potentially start a pump that could take the token higher up.
Other than Dragonchain, cryptocurrencies like Avalanche, Tron, or Optimism might also attract Chinese investors looking for a symbol of luck. This is because of their bright red logos and high positioning on the list of largest coins by market cap.
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Dragon-Related Stocks
Those who believe in the good luck of dragons might also go after some dragon-related stocks later this year. While there is not a massive selection out there (luck just needs only one shot, right?), there are a few worth mentioning. In fact, the lack of too many dragon stocks narrows it down for market observers.
With that said, one example is S A S Dragon Holdings Ltd., a firm established in 1981 and listed on the Hong Kong Stock Exchange. This is the leading electronic supply chain services provider in the Greater China region, so the firm is already well-known locally.
Thanks to its association with dragons, S A S Dragon Holdings could see a stock increase if investors decide that going after it could bring them luck.
Another example is DoubleDragon Corporation, a Philippine real estate development firm based in Pasay City, Metro Manila. The firm was established in 2009, and by now, it has an entire list of subsidiaries, with one of them, CityMall, building 100 shopping malls by 2020.
DoubleDragon Corporation’s stock has dwindled somewhat over the years, which is why the Year of the Dragon might be a perfect opportunity for it to see a comeback.
Finally, there is Dragon Capital Group Corp., a company founded in 1994 and headquartered in China. This is a firm that focuses on creating opportunities in Vietnam and beyond, and it has been helping its clients gain access to quality investments for over a quarter of a century now.
But, while its focus may be on providing opportunities for Vietnamese investors, Chinese investors themselves might show interest in this firm, especially during the Year of the Dragon.
Where to buy dragon stocks
If you're looking for a place to buy these stocks, you'll find them on Saxo Markets. The platform has one of the largest selections of assets out there, and it has trading tools to suit both beginners and pros.
Red or Luck-Related Stocks
While the number of dragon-related companies is relatively limited, there are other firms that Chinese investors may believe to be lucky investments. With red being the color of luck and good fortune, we also considered some of the firms that have “Red” in their names.
A few firms that immediately came to our attention included China Red Tourism Group, Red Flag Software Co. Ltd., and Redsun Properties Group Ltd. Each of these is operating in a highly profitable sector, namely tourism, software development, and real estate.
But, apart from them, we would also point out Alibaba — a Chinese multinational technology company, and one of its largest tech giants. Not only because there have been rumors that the company might see a recovery after reporting respectable growth in revenue in Q2 2023, but its co-founder, Jack Ma, was born in the Year of the Dragon.
Stocks with potential
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High-Risk Assets
Finally, encouraged by the Year of the Dragon and convinced that it could bring luck, investors might also decide to go after various high-risk assets, believing that their risk-taking could pay off.
This could include assets like cryptocurrencies, mini-bonds (also known as high-interest return bonds), real estate, or engage with products like land banking schemes.
It is also worth noting that there is an investment product that is more directly connected to dragons–the name is Bond, Dragon Bond! This is a long-term debt security issued by companies that operate in some Asian nations. Dragon bonds are denominated in stable foreign currencies, like the USD or JPY.
A Year for Good Fortune
The Year of the Dragon likely won’t mean much to most people, but those close to Chinese culture could take it as a symbol of better times to come. Chinese investors, in particular, could be encouraged by this to take greater risks, which could have an impact on the investment landscape.
Does that mean that they will be right and that dragon-related stocks will make them rich? We can’t say “Sure”. However, by taking that chance, they might be the force that could drive the price increase of these stocks, and if that ends up happening, a lot more people could join them and pump the prices even higher.
At the very least, it is an interesting concept and one small factor that could help shape market sentiment in 2024. As such, it is worth remembering, and at least keeping an eye on the assets that might attract investors looking to benefit from the dragon effect.
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