Tuesday, August 27, 2013


So guys, screw my investing plan so far, a new world order is in place.

Firstly, the economy is going DOWN, not up. It's going to be a horrible time to buy anytime with hopes of holding it long term now. It'd be much better value to buy into the market once everything has come down. I'm talking mega massive all savings in to all my pre-recession allocations.

But now, the order of the day is capitalizing on what is going on now.

Firstly, to make money off the bear market, it's not easy. You need to know the market that is going to crash. You need to know the stocks that are going to crash. You need a broker that will short sell you the stocks. You need to buy into an inverse ETF fund of your market in choice.

Sadly, for a Singaporean like me, my options are severely limited. If I could have it my way, I'd buy into leveraged inverse ETFs of India, Thailand and Malaysia. However, all that's available for us on the market now is the inverse S&P500. We don't have brokerage access to those markets to short stocks from there too. SO WHAT NOW?

Hope that the S&P500 will come down as well? Go long on the US against EM currencies? Honestly, with the US going loco with their tapering and now warmongering, I'm honestly confused about what is supposed to happen. Tapering means that the economy is improving right? Many signs point at a worsening US economy.

I've realised a way out of this rut though. CFDs. CFDs aren't real stocks or indices, so it's possible to short them. CFD providers have indices as well as currencies, but of course, not those exotic EM ones.

So I guess my current plan of action is to ride the recession downwards, reallocate funds when I see signs of recovery. When either a time is just too tempting or when there are no more opportunities downwards, I'll capitalize all my gains, and I'll start going long into the opposite direction. Hopefully this time, with much more capital to begin with! My plan in the next post!

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