Friday, 25 January 2008

An interesting week in the market

Well, that was an interesting week as an equities investor. After a huge drop at the start of the week, there was a run of three exceptionally positive days, resulting in the most incredible "bounce" I've seen since I started investing in the 80's.

Looks my decisions this week worked out OK
1. Sold some IPE and shifted the funds into CDF to realise a capital loss. This will avoid having to pay any capital gains tax on the profit I made on trading Centro properties.
2. Didn't panic and sell off any of my stock portfolio, despite signs of panic in the world markets just before the US Fed announced it's rate cut.
3. Added to my existing holding of CDF on Tuesday, at what turned out to be the low for the week. It's since gone from $1.66 back up to $1.85,

I also started trading forex again this week. I'm sticking to small trades ($25,000 position), and have finally worked out how to set up stop-loss pending orders using the CMC Markets interface (it's obvious once you know which icon to click on the trading window), so I'm able to trade "properly" - letting my winning trades run and automatically closing out positions for a small loss when things don't go as expected. I'm setting stops at around 12 points from my entry price, which with the AUD around 0.8840 USD works out to be 1.35%. So far I'm up around $190 this week, but I've still got a long way to get back to my starting kitty. Having put in a total of $5,000 into my trading account, the current balance is only $1,389.

Copyright Enough Wealth 2007


Fish and Chips said...

so... is it a correction to the bubble that had formed or is it the start of a recession?

The rate cut in the US seems to me to be a bandaid on a cut that needs stitches.

To my mind, the proof will be if the "bounce" continues upwards or if it turns into back into a bear trend going down even further.

I'd be interested to see a post from you on this subject and what you think we can expect from the rest of the year...

TheWild1 said...

yeah I have been trying to get into forex time and time again, but I am just not comfortable with it yet.