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Wu Xin says she’s got a sure-fire plan to recoup losses from the $4 trillion selloff in China’s stock market: pile into equities that hurt her the most.

The 28-year-old from Hangzhou has been snapping up shares in China’s small-cap ChiNext Index, undeterred by a tumble earlier this year that erased half the measure’s value in three months.

“I lost most of my money investing in ChiNext stocks, but they are still worth buying,” said Wu, an ad saleswoman in the media industry. “I can make the most money from them in a rally, too.”

Doubling down on the most volatile equities has become a go-to strategy for China’s 96 million individual investors as the stock market shows early signs of recovery. The ChiNext has rallied 38 percent from this year’s low in September -- three times as much as the benchmark Shanghai Composite Index -- and volumes on the small-cap bourse surged to an all-time high last month.

The rush back into the bear market’s biggest losers shows Chinese investors are still embracing risk, even as the economy heads for its weakest annual expansion since 1990. The danger is that another market downturn could saddle individuals with even deeper losses -- a double whammy that Bocom International Holdings Co. says would do lasting damage to investors’ appetite for stocks. The ChiNext dropped 1.9 percent on Monday.

“If the ChiNext plunges again, it’s going to hurt,’’ said Hao Hong, the chief China strategist at Bocom in Hong Kong, who predicted the stock-market rout in June.

When small-cap shares are rising this fast, buying is hard to resist. Zhu Zujuan, a 60-year-old retiree, says she purchased shares of Dingli Communications Corp., a maker of wireless network testing gear, last Tuesday at 27.2 yuan apiece. After a tea date with friends, she came back home to find the stock had rallied to 30 yuan -- a 10 percent gain in a few hours, without any obvious news.

“The market cap of ChiNext stocks is usually small, so it’s easy for them to rise,” Zhu said from Hangzhou. "I know the risk is high, but so is the return."

The ChiNext’s rally from its September low has extended this year’s gain to 68 percent, despite a tumble of as much as 55 percent from its June peak.

Investors are increasingly trying to lock in quick gains. Average daily turnover in ChiNext shares surged 64 percent in October from the previous month, with about 3.5 percent of the entire market capitalization changing hands on Oct. 23. That was a record proportion relative to Shanghai, where turnover amounted to 1.5 percent of bourse’s market value.

Pan Lizhi, a 55-year-old retiree who has as much as 50,000 yuan ($7,915) in ChiNext shares, says she never hangs on to a stock for more than five days. Despite losing sleep when equity prices crashed earlier this year, she still has about a third of her holdings in small-caps.

"I only make speculative investments in ChiNext,” Pan said from Yiyang, a city in China’s southern Hunan province. “I always rely on feelings when buying stocks. My son says I’m a gambler."

Of course, ChiNext shares aren’t all about short-term speculation. The index is a proxy for “new economy” companies in the technology, consumer and service industries -- some of the biggest beneficiaries of China’s plan to wean itself from a reliance on credit-fueled investment. Earnings at ChiNext companies have jumped 54 percent since the end of 2013, versus a 1 percent drop for the Shanghai Composite, according to data compiled by Bloomberg.

"Regardless of all the criticism about ChiNext stocks, they are mostly in the new emerging industries,” said Yin Ming, a vice president at Shanghai-based Baptized Capital, which oversees about 200 million yuan. His firm invests in environmental protection companies because their earnings have “high visibility” as local governments boost spending on the industry.

For Bocom’s Hong, valuations on ChiNext stocks already reflect the companies’ long-term growth prospects. The index trades for 71 times reported profits, versus 17 for the Shanghai Composite. America’s small-cap Russell 2000 Index has a multiple of 19.

“I wouldn’t be surprised if the ChiNext underperforms,” Hong said. “It is expensive.”

Liu Zongyuan, who works for an engineering logistics company in Beijing, says Chinese stocks have further to fall as the economy slows. Yet despite his bearish outlook, the 30-year-old has as much as half of his investments in ChiNext shares. The key, he says, is to aim for fast gains and know when to cash out.

“I sell immediately when I think the profit is good enough,” Liu said. “I’ve recently made more speculative investments than fundamental-based ones, because I’d like to make quick profits.”

(Updates Monday trading in fifth paragraph.)