Ride the hot China market now, but beware

Investors watch computer screens at a stock exchange hall on May 8, 2015, in Fuyang, China.
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The chase for gains is why Chinese stocks soar, and why a bubble could be forming.

"Part of the problem with the China and Hong Kong market is it's very sentiment-driven, not fundamentally driven," said Barnaby Nelson, managing director of investors and intermediaries in northeast Asian and Greater China at Standard Chartered. He noted that about 75 percent of local investment comes from retail investors rather than professional players.

The allure of easy money is hard for foreign investors to resist. The Shanghai Composite and Hong Kong's Hang Seng are among the top 10 performing global indices, up more than 35 percent and 15 percent, respectively, year-to-date.