Stars need caution in capital market

Chinese actress Zhao Wei and her husband have become the second largest shareholder in Alibaba Pictures, taking a 9.18 percent stake in the film company, according to reports late last month. Unfortunately, the couple may not have chosen the best time to buy - a 7 percent drop in the stock price is said to have shaved some 230 million yuan ($36.7 million) off the value of their investment.

As more entertainment companies pursue direct financing, many Chinese celebrities are becoming shareholders in film, television and online content enterprises. Actress Sun Li, for example, is said to be another significant investor in the sector.

This is a win-win situation for both companies and stars. On the one hand, entertainment firms can benefit from the capital as well as the renown of their famed financial backers. At the same time, celebrities have another way to benefit from enterprises profiting from their talent.

Of course, celebrities unfamiliar with the functions and features of local bourses could blunder into serious losses if they aren't careful. Furthermore, inexperienced individuals should not let the investment moves of their favorite stars lead them into making unwise financial decisions.