Happen to coincide with what was predicted in the my last article.
Showing posts with label Invest. Show all posts
Showing posts with label Invest. Show all posts
Apr 8, 2012
Apple Leading the Collapse?
Happen to coincide with what was predicted in the my last article.
Market Peaking in Late April?
Picture tells a thousand words. Getting your money ready anyone?
Jan 30, 2012
Follow the Venture Capitalists
Quoted from newswire today:
One would want to track closely the companies that Sequoia Capital is interested in, just like how people track the companies Warren Buffett is interested in :-D
Sequoia Capital provides startup venture capital for very smart people who want to turn ideas into companies. As the “Entrepreneurs Behind the Entrepreneurs”, Sequoia Capital's Partners have worked with innovators such as Steve Jobs of Apple Computer, Larry Ellison of Oracle, Bob Swanson of Linear Technology, Sandy Lerner & Len Bozack of Cisco Systems, Dan Warmenhoven of Network Appliance, Jerry Yang & David Filo of Yahoo!, Jen-Hsun Huang of nVIDIA, Michael Marks of Flextronics, Larry Page & Sergey Brin of Google, Chad Hurley & Steve Chen of YouTube and Steve Goldman & Sujal Patel of Isilon Networks.
One would want to track closely the companies that Sequoia Capital is interested in, just like how people track the companies Warren Buffett is interested in :-D
Jan 27, 2012
Chances of a Recession in an Election Year
The US Presidential Election will be held on Nov 2012. According to the "Stock Trader's Almanac 2012", the Dow Jones Industrial Average rose in 33 pre-election years out of the last 44 election cycles. The DJIA rose in 29 election years out of the last 44 election cycles. You decide.
Jan 26, 2012
The Best Times to Put Your Money into the Stock Market
I do not follow this. But I thought it is a good knowledge to have.
Stock investors, people who buy the market and other long-term investors would be interested to find out when is the best time enter the market. Knowing "the right time" will increase the probability of making money as well as the probability of making most money.
Conventional wisdom says to buy stocks during end September and early October period as historically, it is during this period that the market makes new lows within the year. The historical evidence for this is presented at Investopedia. There is also the pre-holiday rally where stocks tend to rally ahead of 3-day holidays in the United States. Then comes the January Effect, that also contributes to the Santa Claus Rally. For those looking for a quick buck, you may consider entering a day after Christmas. The Santa Claus Rally historically ends a few days after New Year's Day.
This article titled "Capitalizing on Seasonal Effects" also presents other useful and interesting market timing research such as:
With the US presidential election up and coming, there are also ways to capitalize on this market-moving event.
Stock investors, people who buy the market and other long-term investors would be interested to find out when is the best time enter the market. Knowing "the right time" will increase the probability of making money as well as the probability of making most money.
Conventional wisdom says to buy stocks during end September and early October period as historically, it is during this period that the market makes new lows within the year. The historical evidence for this is presented at Investopedia. There is also the pre-holiday rally where stocks tend to rally ahead of 3-day holidays in the United States. Then comes the January Effect, that also contributes to the Santa Claus Rally. For those looking for a quick buck, you may consider entering a day after Christmas. The Santa Claus Rally historically ends a few days after New Year's Day.
This article titled "Capitalizing on Seasonal Effects" also presents other useful and interesting market timing research such as:
- Middle of a month is the best time to buy stocks
- Monday is the best day in a week to buy stocks
With the US presidential election up and coming, there are also ways to capitalize on this market-moving event.
a potentially lucrative investment strategy would have included buying on October 1 of the second year of the presidential election term and selling out on December 31 of year four.Well, the above is based on historical data and I see it as more of a guideline. Cycles do adjust themselves and some seasonal effects have been proven to be invalid these few years. For instance, this article from Fundsupermart.com dispels the famous "October Effect" and "January Effect".
Jan 5, 2012
Dollar Cost Averaging in a Flat Market
I read in a blog that if one were to buy into the stock market in 2000, he would still be losing money by the end of 2011. It is not difficult to tell that from the chart below.
Chart from Yahoo! Finance
Then I read a comment on the same blog saying that that is not a fair statement because in investing, one has got to take into consideration the effect of Dollar Cost Averaging. Intrigued, I downloaded the historical data for SPY and verify it for myself.
Condition:
Start Date: 1 Jun 2000, SPY at: $145.28
End Date: 1 Dec 2011, SPY at: $125.50
Buy $500 worth of SPY monthly from 1 Jun 2000 to 1 Dec 2011.
Result:
On 1 Dec 2011, we would have spent $61,113.37 buying SPY. The market value of the SPY that we are holding is $66,766. We are sitting on a profit of $5,652.63 which is 8%.
Well, the commenter is right. we will not lose money if we have done Dollar Cost Averaging. But the profit is not impressive. I mean, 8% for 11 years! Not to forget that I did not include the transaction fees and dividend payout (if any) in my calculations.
Chart from Yahoo! Finance
Then I read a comment on the same blog saying that that is not a fair statement because in investing, one has got to take into consideration the effect of Dollar Cost Averaging. Intrigued, I downloaded the historical data for SPY and verify it for myself.
Condition:
Start Date: 1 Jun 2000, SPY at: $145.28
End Date: 1 Dec 2011, SPY at: $125.50
Buy $500 worth of SPY monthly from 1 Jun 2000 to 1 Dec 2011.
Result:
On 1 Dec 2011, we would have spent $61,113.37 buying SPY. The market value of the SPY that we are holding is $66,766. We are sitting on a profit of $5,652.63 which is 8%.
Well, the commenter is right. we will not lose money if we have done Dollar Cost Averaging. But the profit is not impressive. I mean, 8% for 11 years! Not to forget that I did not include the transaction fees and dividend payout (if any) in my calculations.
Jan 3, 2012
Investing Basics
Investing, in general, talks about holding some investment vehicle for medium to long term. It could be anything from a few months to a few years.
However, investing need not just be done with stocks. You can invest in ETFs, CFDs and/or properties for that matter.
Here are some articles:
Basic Investing
http://www.investopedia.com/university/beginner/#axzz1XqTBkHGw
http://www.moneysense.gov.sg/resource/publications/guides_publications/IMAS%20Personal%20Investing.pdf
Einstein says Compound Interest is the 8th wonder of the world! So it is important to know.
Compound Interest
http://www.getrichslowly.org/blog/2006/05/23/how-compound-interest-favors-the-young/
http://www.getrichslowly.org/blog/2008/04/02/the-extraordinary-power-of-compound-interest/
Other concepts to grasp:
Diversification (or Divest)
http://www.investopedia.com/articles/02/111502.asp#axzz1XqTBkHGw
http://www.sec.gov/investor/pubs/assetallocation.htm
However, though diversification is recommended, I am a believer of not over-diversifying:
http://www.investopedia.com/articles/01/051601.asp#axzz1XqTBkHGw
Portfolio Rebalancing
http://www.sec.gov/investor/pubs/assetallocation.htm
Dollar Cost Averaging
http://www.investopedia.com/articles/mutualfund/05/071305.asp#axzz1XqTBkHGw
I believe in averaging in when the market is moving down and do nothing when the market is moving up:
http://www.managedwealthsingapore.com/interesting-thoughts-about-dollar-cost-averaging/
Then if you have decided to go for stocks. The next question will be what stocks to buy. Then we will have to look at investment techniques such as:
- value investing -> Warren Buffett does this
- growth investing -> Peter Lynch does this
In Singapore, I have also heard of friends who focuses on high dividend stocks and doing quite well. So that may be worth considering.
Some books that talk about investing strategies:
The Little Book That Beats the Market - Joel Greenblatt
How To Make Money In Stocks - William O Neil
However, investing need not just be done with stocks. You can invest in ETFs, CFDs and/or properties for that matter.
Here are some articles:
Basic Investing
http://www.investopedia.com/university/beginner/#axzz1XqTBkHGw
http://www.moneysense.gov.sg/resource/publications/guides_publications/IMAS%20Personal%20Investing.pdf
Einstein says Compound Interest is the 8th wonder of the world! So it is important to know.
Compound Interest
http://www.getrichslowly.org/blog/2006/05/23/how-compound-interest-favors-the-young/
http://www.getrichslowly.org/blog/2008/04/02/the-extraordinary-power-of-compound-interest/
Other concepts to grasp:
Diversification (or Divest)
http://www.investopedia.com/articles/02/111502.asp#axzz1XqTBkHGw
http://www.sec.gov/investor/pubs/assetallocation.htm
However, though diversification is recommended, I am a believer of not over-diversifying:
http://www.investopedia.com/articles/01/051601.asp#axzz1XqTBkHGw
Portfolio Rebalancing
http://www.sec.gov/investor/pubs/assetallocation.htm
Dollar Cost Averaging
http://www.investopedia.com/articles/mutualfund/05/071305.asp#axzz1XqTBkHGw
I believe in averaging in when the market is moving down and do nothing when the market is moving up:
http://www.managedwealthsingapore.com/interesting-thoughts-about-dollar-cost-averaging/
Then if you have decided to go for stocks. The next question will be what stocks to buy. Then we will have to look at investment techniques such as:
- value investing -> Warren Buffett does this
- growth investing -> Peter Lynch does this
In Singapore, I have also heard of friends who focuses on high dividend stocks and doing quite well. So that may be worth considering.
Some books that talk about investing strategies:
The Little Book That Beats the Market - Joel Greenblatt
How To Make Money In Stocks - William O Neil
Jan 2, 2012
Investing System Sharing: Dogs of the Dow
Along the way, I also got distracted and researched into investing systems.
One of such investing systems is the Dogs of the Dow system.
Does it work?
The results are published on the main page. More details are here. Let me make it clearer here:
1996 +28.6%
1997 +22.2%
1998 +10.7%
1999 +4%
2000 +6.4%
2001-4.9%
2002 -8.9%
2003 +28.7%
2004 +4.8%
2005 -5.1%
2006 +30.3%
2007 +2.2%
2008 -38.8%
2009 +16.9%
2010 +20.5%
How to do it?
Just follow the steps here. There is a variant of the Dogs of the Dow system known as the Small Dogs of the Dow which is a more aggressive system.
My Take
I trade. I find the trader's mindset very much in conflict with the investor's mindset. Ultimately, I did not use this system at all. One tip with the use of such systems is to read all the fine prints. For instance, for this system, the results shown require one to reinvest all dividend payout back into the portfolio. So results may vary.
One of such investing systems is the Dogs of the Dow system.
Does it work?
The results are published on the main page. More details are here. Let me make it clearer here:
1996 +28.6%
1997 +22.2%
1998 +10.7%
1999 +4%
2000 +6.4%
2001-4.9%
2002 -8.9%
2003 +28.7%
2004 +4.8%
2005 -5.1%
2006 +30.3%
2007 +2.2%
2008 -38.8%
2009 +16.9%
2010 +20.5%
How to do it?
Just follow the steps here. There is a variant of the Dogs of the Dow system known as the Small Dogs of the Dow which is a more aggressive system.
My Take
I trade. I find the trader's mindset very much in conflict with the investor's mindset. Ultimately, I did not use this system at all. One tip with the use of such systems is to read all the fine prints. For instance, for this system, the results shown require one to reinvest all dividend payout back into the portfolio. So results may vary.
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