Tuesday, August 27, 2013

The Big Bet

Hi guys,

Please remember that the information presented here is "as is", it is my opinion and thoughts, and I am definitely not encouraging you to follow my actions. What I present here should not be taken as financial advice.

This plan that I have takes into account the limited investment options available to me as a Singaporean investor.

The aim of this plan is to take advantage of the current global situations, which in my opinion, does not happen very often. Due to the conflicting and rare nature of the many situations, I think that many investors are now confused and in a state of panic, and will not be able to react well.

The investment vehicles that I will use are, mutual funds, CFDs and forex.

I have, as of today, zero actual real life investment experience. I have traded forex on a demo account on and off for the past few weeks, both making and losing money. I have researched extensively about mutual funds, and I just discovered CFDs today.

Actually, the mutual fund isn't really a big bet about it being risky. The annualised returns over the past 10 years stands at 5% on the dot, and that's pretty good. In the past few years, gold miners hasn't been doing too well, and honestly now is the bottom since the last recession. Hur hur, the last recession eh? Anyway, YTD it bottomed at -44%, but now it's only -28%. When war breaks out, hyperinflation, currency depreciation, this could actually be the winner over the next few years. So, for my first long time investment, I'm going into UOB United Gold and Gen Fund.
"Further research has made me believe that Gold is not in a bull market, mining equity will not stand to grow, and Gold will head back down to be in sync with the miners with all the geopolitical commotion is over." - 30 Aug update

Okay, next up is my actual crazy risky day trading shit. I'm going to go short on S&P500, STI and the India Stock Market. They are all related to each other by a factor of 1, 2 and 3 respectively. My plan is touch the water going into the S&P500, looking for a nice sweet technical entry. If that holds up, on the next technical entry, I'll be increasing my position in the S&P500 to my maximum allotment. After that, once it's heading back down again, I'll buy into the STI for half and wash and repeat. If the market plummets, I'm jumping straight in. Definitely setting stop loss to lose a maximum of 10% of my capital, or 0.5% in terms of the market.

Once, I'm totally invested into all 3 indices, I'll set my stop loss to ensure that no matter what, I don't lose my capital. I will progressively inch down my stop loss (gain) to make sure that my returns would be maximised.

Concurrently, I will also buy into the USD/SGD long, and the TRY/USD short. The SGD and TRY are both currencies that are susceptible to volatile shifts.

If all my positions are doing well, I will gradually transfer in more capital to the accounts and scale up my positions. My initial start value will be $5,000 into the account.

My confirm stop losses will be the nearest resistance when the market has move 5%, 10% and 20% down from its total value. This will ensure that I will definitely make some profit. I can always enter back in once it is trending downwards. Once the markets have bottomed out, I will capitalize all my positions and enter in long.

How's that for an idea? :)


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