What is your secret to investing successfully?
You should always have a view of the market and make sure you have a couple of reasons to justify those views. Then with a view, plan your trade and trade your plan. Having a strategy and sticking to it is very important - too many times clients deviate from their original plan and end up getting married to a losing position with the hope of a reversal. Leave emotion at the door as the market always throws up new opportunities. We deal with high leveraged products, so managing your risk is paramount in this business to ensure a long and successful trading life.
And the outlook for this month?
The risk off sentiment has been dominating the markets … with higher yielding and emerging market currencies, equities and commodities all selling off and we expect this trend to continue through the summer. Sentiment will continue to be driven by US Fed policy (or lack thereof) and intraday market moves will be US-data dependent. The dollar and US bonds will be in demand on the back of the flight to safety trade and expectations are for the dollar index to consolidate in this channel between 82-84.50. Expect the recent volatility to continue with the recent bear trend across all asset classes to be more pronounced through the third quarter.
Any grounds for optimism?
It's hard to make a case for optimism these days considering the current state of the markets. Globally demand has been slumping, growth is on the wane, central banks continue their easing plans, China is gearing up for their very own credit crunch, and the once hot emerging markets are slowing down. With the full effect of the US sequester in play, jobs growth in the United States hasn't had the necessary traction to justify the start of a US recovery. This will be key in establishing any sense of optimism in the months ahead - and unless we see consistent jobs growth, upwards of 175,000 a month, the glass will remain half-empty.
What's looking attractive?
Other than the dollar and US bonds, which will remain in vogue through the summer, the recent weakness can make a case that the recent sell-off presents attractive entry opportunities with a view on the long term. This strategy is slightly risky, particularly for equities as I don't think we have seen the full depth of this bear run. With the Indian rupee hitting record lows against the US dollar, Indian fixed deposits look very attractive - you are guaranteed yield upwards of 8 per cent in the year and if you factor in future forecasted rupee strength you are looking at an additional 7 per cent on currency appreciation. For a more liquid trade and on a shorter term view, I would look at the US dollar/Japanese yen which looks good to make another run to 103.
What was your best investment?
Despite my focus in equities, currencies and commodities - perhaps my best investment in terms of overall return come from a very unlikely source - bitcoins. Back in 2011, I was making a purchase online and upon checkout the vendor informed me that they only accepted bitcoins as payment, quite curiously. So after converting US$1,000 into 2000 bitcoins at the time, I made my purchase and went on my way with 200 odd bitcoins left in my online wallet. Much to my surprise the value of each bitcoin appreciated to an astounding $30 and within a few months my 200 bitcoins were now valued at a cool $6,000 - not life-changing money by any means, but you don't come across a return of 60 times or 6,000 per cent that often, let alone in a couple of months.
And the worst?
With regards to my personal portfolio, I've been caught on the wrong side of a bear rally in gold on a few occasions - I remember when I was quite fresh in my career I piled into a few gold contracts in early 2006 when it rallied up to an all-time record of $730. Lack of a trading plan and poor risk management on my part, coupled with numerous hikes to the initial margin requirements saw my positions get stopped out. Of course we all know how gold performed following 2006 and if I was slightly more conservative it perhaps would have been a different situation. It was a tough lesson back in the day.
* The National
