What have all the retail investors do wrongly?

Chew Hock Beng

What do you really want as a retail investors so that you can sleep well at night?

Returns. Of course, everyone loves high return on their investment!

In search of such returns, so what do retail investors actually do?

Just do it! Go for return!  

Hence they started trading. From hear-say, they start picking stocks from anyone who has made money, thinking it’s the best stock tips and starting to punt. Hoping these stocks tips could help them to grow and double their wealth within the shortest possible of time. Soon after they started to apply leverage trading which is very likely not suitable for their risk appetite and investing time horizon.

wrong-wayTo make the matter worse, some do not have any ideas what they are invested in. You must heard many times people have burnt their fingers. They invest for the sick of investing because everybody say have to invest. So follow, can’t be wrong.

So it’s your best interest not invest in products you do not understand. And do not invest in “hot picks” or “trendy stocks” just because others are buying them.

In addition, they do not have any specific concrete goal to follow and tracking their progress. No duration to gauge on what kind of returns should be expecting. No yardstick measurement to follow.

It’s always good to understand and find out where is the place where your money could work for you. Setting goal is critical as it sets the direction and provide a path of certainty.

So you can tell that investing is not everything about returns, especially when there so many investment instruments in the market.  Finding the right and suitable tools is important. In fact, handling risk is the important element in investment.

As retail investors have no idea of their risk profile, when market volatility arrives,  they don’t know how to react because they have no idea about their personal risk preferences.   

So what is risk profile?

Knowing your risk profile is just like knowing your personal health condition. Instead of wondering if your body can react to the tough physical training, it’s the same when your hard-earned money is subject to the market stress-test. In fact, it’s putting your emotion to test whether you can take the pressure of the ups and downs of market movement.

So doing a risk profile assessment to understand your risk appetite and risk preferences could be a good step to embark at.  

We will show you at the talk to find out what type of investors are you.

For now, let’s assume you’re balanced risk taker.  So a typical 50% Equity and 50% Bonds portfolio is set up for your profile type. Let’s say the equity market went down by 50%, and Bond market drop by 10%. At this instance, your portfolio is down by 30%, instead of down by 50% if you’re not aware of your risk profile. You can see that such portfolio manage risk and provides diversification. Mostly importantly, it takes lesser time and effort for the balanced portfolio during the recovery market.  

Having the right knowledge and applying it right pays. The last 2 questions could be a useful thought-provoking for you.  

Which group do you belongs to?

And which group do you prefer?

I think the choice is clear.


Weekly Inter Market Analysis Oct 23-2016

See previous week Weekly Inter Market Analysis.

Original post from http://mystocksinvesting.com


SPY is still staying above the big Rising Wedge support after broke down from a Symmetrical Triangle. Keep an eye this coming week to see whether there is a follow through of this breakdown.

  • Resistance turned support zone: 211-213
  • Rising Wedge immediate support: about 210
  • Previous Head and Shoulders neckline support: about 204.
  • Rising Wedge next support: about 200



VIX dropped below 15 again, a complacent zone. Still no fear in the stock market.



Sector Performance (SPDR Sector ETF)

  • Best Sectors: Material (XLB) +1.60%
  • Worst Sector: Industrial (XLI)  -0.24%



SUDX (S&P US Dollar Futures Index)

SUDX broke out from the Symmetrical Triangle and broke the next resistance at 130.36. If this continues, SUDX will start a confirm uptrend.



FXE (Currency Shares Euro ETF)

FXE broke the rising trend support and currently testing a critical support. If this support (red zone) is broken, FXE is expected to star a next down trend move.



XLE (SPDR Energy Sector ETF)

XLE is expected to trade within the up trend channel. 200D SMA is starting to trend up. Keep an eye of the energy sector recovery (driven by Crude Oil, see USO chart)



USO (United States Oil Fund)

USO broke the resistance. If USO can stay above this resistance (about $11.44) and make this level a resistance turned support, USO will start an uptrend.



TLT (iShares 20+ Years Treasury Bond ETF)

TLT rebounded from the support at 132.5 and just closed just above the 200D SMA! 200D SMA is still trending up and coincides to 61.8% Fibonacci Retracement Level. This will be an attractive entry point if this 200D SMA support is valid.



GLD (SPDR Gold Shares)

  • GLD looks like rebounded from the 200D SMA support. 200D SMA is trending up.
  • GLD is also sitting on the 61.8% Fibonacci Retracement Support.
  • Expect GLD to rebound from level.



Next Week Economic Calendar

Key events:

  • Germany Manufacturing PMI Oct 24 (Monday)
  • ECB President Draghi speaks on Oct 26 (Wednesday)
  • Crude Oil Inventory on Oct 26 (Wednesday)
  • Pending Home Sales on Oct 27 (Thursday)


See other Events here. http://mystocksinvesting.com/events/

Global Stock Market Indices PE Ratio At a Glance (22 Oct 2016)

Market Indices PE Ratio for Major Stock Exchange globally

  • US: Dow Jones Industrial, S&P500, NASDAQ, Russell 2000
  • Europe: FTSE100, CAC40, DAX
  • Asia: KLCI, STI, HangSeng, ASX200, CSI 300, JCI, SET, KOSPI, NIKKEI 225, SENSEX, TWSE, NZX50, PSEi
  • Best Performer: France CAC40 up for 4.7% with PE Ratio of 22.29.
  • Valuation of Global Stock Market is NOT cheap base on PE Ratio. Simple Average PE Ratio decreases from 23.52 to 23.35.
  • Europe Stock Market was the best performers last month.
  • Singapore STI has the lowest PE ratio of 12.01 compare to the rest of the world in the following table.


  •  PE  = Price Per Earning

See Sept-2016 Global Stock Market PE Ratio here.



Original post from http://mystocksinvesting.com

See other event here. http://mystocksinvesting.com/events/