Sunday, 25 January 2015

Recent interview Questions by Shares Investment with Daniel Loh

Question 1:

1) 2015 is poised to become a very volatile year in terms of the global economy as well as markets. In your opinion, what are the possible dangers that investors should keep note of. 

Daniel's Answer

2015 is a difficult year to play stocks. If investors are not careful in selecting the right markets to play, one might be hurt. The main reason for the uncertainty is the rise of the interest rate. We have already seen what happened in the last few months. It all started last year july when the US dollar goes into a bull market, ending 13 years of bear market.

Uncertainty of the interest rate has caused investors to park their money inside US dollar. And this has caused a lot of turmoil and volatility in some markets.

Firstly, the Crude Oil price crash as a result of the rise of US dollar. Some may say it is OPEC decision that caused crude to crash. But US dollar does play a significant role too. Then there was a collapse in some currencies such as Euro, Aussie, Yen or some emerging market currencies like Ringgit. The latest episode is of course the spike of the Swiss Franc. Bond Prices also shot up recently.

If retail investors are not careful in selecting the right market to play, they may suffer from hugh losses as volatility in some of these markets are high.
Question 2:

Since you will be talking about crude oil in your address, could you share your thoughts about the price of precious metals?
Daniel's Answer: 

Precious metals surprising has stabilised after the Japanese government announced the second time that it printed money. Gold touched a bottom of $1130 before the rebound. I do think that precious does look like a good investment before the rise of interest rate. 

It is once again a safe haven just before the uncertainty of the FED interest rate decision. That is the reason you see the Gold and Silver are rebounding these few days. I do think there is a chance of higher prices in the mid term.
Question 3:

What do you think are the common mistakes that investors and traders make when executing a trade?

Daniel's Answer:

The most common mistake is most investors do not know the duration they want to hold. When investing, we can day trade, position trade told for 1-2 months or we can buy stocks and hold long term for a few years. 

When most investors buy stocks, they normally do not have an idea how long they intend to hold on to their positions. Only when we are clear about the duration, then we find the methods to suit the time frame. 

An example would be placing stop losses. We are sometimes taught in books that placing stop losses are important. Not necessarily true. Some of the well-known investors don't place stop losses. Investors like Warren Buffett don't, because they are long term investors. 

They even average down to buy more positions when price goes cheaper. We can't say they are wrong. They are long term investors who can hold a position for 20 years. However for day traders, not putting a stop loss would be unimaginable. 

The most important thing for investors is to know what time frame suits them.

958访谈9月21日:展望2017年股市与经济:美国联储局都不看好美国经济?

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