Page 47 - DIY Magazine September 2018

m up 22% since April, but sadly only have £5k invested; I need a bit of weakness to take the price down below the two week average (green) and then pivot back up... and I’ll be in with another £5k.
‘Why don’t I just buy the damn thing anyway?’ I’ve learned the hard way to never ever chase prices; until it makes my buying signal, I’ll engage in masterly inactivity.
I do fret about what I think are crazy valuations for tech stocks; but hey, trade what you see, not what you think - £20k of my money is in the sector.
I’ve three holdings: Neptune Global Technology Fund is up 17%, AXA Framlingham Global Technology Fund up 16% and Polar Capital Global Technology Fund up 10%. I’m a big fan of the no nonsense Terry Smith; he has a medium size fortune invested in his Fundsmith Equity Fund, my meagre £5k is up 10% since May and looking at the ‘slope of hope’ I may top up.
All my other holdings are in profit, albeit some only slightly; I made only one sale in the quarter, the Neptune Emerging Markets Fund that cost me £270 to stop loss out of my £8k position. More detail here.
So, I think my idea of investing only in funds to get round my inability to do fundamental analysis effectively is
a good one, and I’ve tied it into a momentum strategy using my liking for and, dare I say, ability with charts.
I’m not looking for a balanced portfolio anymore and I realise that my aggressive approach of following the hot money does have dangers and clearly isn’t for widows and orphans, but, hey you’ve got to risk it for the biscuit. I’m targeting financial independence with noughts on, and aiming for market beating returns; easy to say, not so easy to do, but 3 or 4% compounded up transforms the figures.
Looking ahead, what a bloody mess; the UK is in such a state, I’ve never seen anything like it in my lifetime.
Theresa May seems to have succeeded in winding up the entire country with a deal that is far worse
than remaining; my guess is that the political crisis at Westminster will intensify and spill over into the real world, creating even more volatility going forward. Wild swings are emotionally difficult for investors in general and for a momentum investor who uses stops as I do, it’s downright dangerous.
The risk I face in a sideways and volatile market is of being constantly whipsawed in and out of positions
and the danger a swing trader like Fagin who takes trades for a few days to a few weeks (depending on how quickly they pan out) is much the same.
The risk I face in a sideways and volatile market is of being constantly whipsawed in and out of positions
and the danger a swing trader like Fagin who takes trades for a few days to a few weeks (depending on how quickly they pan out) is much the same.
Here is a good example of what I mean.
The black arrow highlights a 30% upswing in about
a year and a quarter, then the pattern changes, the red arrows pinpoint stop positions and the green ones buying points; as you see, out then back in, then out, then back in, then out.
We invest and trade in the real world and there is always something happening that has an impact on what we do; I just cannot get my head round the mess that our cretinous politicians have created, but we are where
we are. Although I think conditions are very dangerous I’m just going to carry investing my system; chart says buy..I’ll buy, chart says sell..I’ll sell.
47 DIY Investor Magazine | Sep 2018