Thursday, September 04, 2008

Investing in Volatile Markets

What are the three most important factors in investing in property? They are location, location and location.

What are the three most important factors in investing in equity? They are timing, timing and timing.

If you invest at the right time, you can earn 5% to 10% more, compared to investing at the wrong time. What is the right time? It depends on major events and how they affect the market prices.

You can learn about the impact of events on market prices through this simulation game:

www.tankinlian.com/trader

Tips:

1. If interest rate goes up, the currency goes up
2. If USD goes up, JPY and EUR is likely to come down.
3. If stock goes up, bond is likely to come down (as people sell bond to buy stocks)
4. If oil price goes up, USD is likely to come down, and gold will go up.
5. If the US economy does well, the US stock and USD is likely to go up.
6. If company profits goes up, the equity is likely to move up.

With these tips, see if you can learn the right timing decisions!

4 comments:

Vincent said...

I thought we shouldn't try to time the market??

Tan Kin Lian said...

Hi Vincent,
If you are investing a regular sum over the years, there is no need to time the market.

If you are investing a large sum, it is important to find the right time to make the investment (if you are able to). You can learn the skill of how the prices move according to the market events.

If you are not sure, you can break the investment sum into a few portions and invest them over a period.

If you are already invested, it is better to stay invested, if you are a long term investor.

Tan Kin Lian said...
This comment has been removed by the author.
Everlearning said...

Just read about Ospraie Hedge Fund in USA collapsed a while ago. Looks like investors in commodities are in for a shock so soon. I wasn't sold into it because I felt that speculation on commodities fund would skyrocket prices on commodities and thus create further hardships on the poor. I suppose Hedge Fund bought from Ospraie is affected. What about those that our local banks promoted in the past?

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