300% per annual return investment

Hey Folk

http://www.straitstimes.com/business/invest/commission-free-stock-trading-by-year-end

Technology have increase competition. The way business are done is different. The above article is more like a CFD firm. Usually they don’t have commission, they earn from the deposit we bank into their account, they earn from the spread, some real bad ass CFD firm earn from the bet that is against your position. Good and bad at the end of the day.

The hard truth of investing.

A lot of people want to earn a lot from investing. The truth is if any money manager can achieve 10% per year for a extended period of time he/she is consider the real deal.

There are lots of system or method out there that generate much higher return say up to 60% to even 300% a year. But usually they do not last the test of time. My painful experience tells me that these system usually last for a good 1 month to a year before collapsing.

The simplest and easiest way of investing is a monthly contribution of the same amount of money or a lump sum into a very good assets class and wait. The next question is how to identify the good assets class. These take some skills to do that. Also with these fast changing environment, one have to be on top of the game to know when to change asset.

Investors usually make a mistake of believing in short term gain and not long term benefits. I had tried, tested and experience these part of investment that I agree there are system that give very high returns in a short period of time but these system have got very high risk and short period of effectiveness. Buying a long term investment and wait for 20 to 40 years like what Warren Buffet does is still the single best lazy man and idiot proof method of making money.

Confession

I do have many accounts that trade different instrument and different method.

Over the last few years, the short term trading method account do perform well in the initial period, and as time passed they will go under water. These are the account that give you the excitement, but do not give u the reward as time pass. The swing trading account perform fairly well. These are the account that usually ride a trend until it get exhausted.

I do have long term accounts, I buy SPY (S&P 500 ETF) and keep for a long time. These are soooo boring, but you will see it grow slowly. There are no excitement at all, no stress, just buying them when the market is right. I did a calculation, if you buy a 10k amount and the instrument rise at the rate of 8% per year. In 40 years you will have a value of 21 times your capital.

Cheer

Rate raise Alert

Hey Folk

Rate raise alert again. The Fed had say that most likely they will raise the rate in June. The same condition must be met for rate raise, they are inflation and jobs.

I am not going to predict if it going to raise the rate eventually in June, I really do not know if that is really going to happen or are they just trying to prepare the market. The job of a trader is to read and understand current situations then act on it and not trying to predict the future. So let not speculate about all these.

The situation now for stock market is still short term downtrend, long term up trend. You can choose to stay at the side line for now until things are more clear to buy again.

The above chart predicts the move of Gold. The chart is in weekly. It will not tell the magnitude but duration of the direction. The chart show the relationship between gold and bond price inverted.

These are some interesting tools to share. During my research I manage to get them out. Again these are not timing indicators, it just tell us what to expect in the near future. As much as I cant predict, but there is certain intermarket relationship that can tell us some stories. Market is moved by conditions and not charts.

Cheer

Shaky moment

Hey Folk

The market now is like what we have in December last year. Shaky again.

Overall we are still in a low interest rate environment and the Advance/Decline also show that is moving up. Bond price is still in the up move and no big divergent against the stock market.

The big picture is still up, but in the near term the market maybe coming off.

Stock market top is much easier to spot than stock market bottom. There is no sign that the market is toppish for now. I wish to point out something, stock market are usually upward bias. To beat the market, we can just maintain a long term buy position and spot the toppish picture and short the market. In this case, one will beat the market.

Take note some swiss based bank in Singapore are going to charge u interest for depositing Euro or Swiss franc. So instead of getting interest you are paying interest. This is the negative interest rate environment.

Cheer