#219. Exit Strategy For Investment

Know When To Exit

Many things are happening around my life in the past few weeks. Among the biggest was involving in a car accident. The car was badly damaged in the back, but I was safe. Thanks to the faithful strong Mercedes-Benz I was in.

I was stopping at a traffic light when I heard a loud bang. And in a split second I was hit. A Wira was driving very fast and rammed into the taxi behind me. Both the taxi and I was stopping at a traffic light. And we were stopping! How could a car drive so fast nearing a traffic light? The Wira driver surely was not paying attention on the road.

And the taxi driver made a common mistake most drivers make. He didn't step on the brake and use the handbrake when stopping at the traffic light. So when his taxi was hit by the Wira, the car flew into the back of mine. Since I had the brakes on, my car moved only slightly. Still, the momentum from the Wira was so great that my car moved and hit slightly the rear bumper of the car in front of me... Imagine that. 4 cars were damaged that night. All because of a person who did not know when to stop his car.

That brings us to the topic of this post. Exit strategy.

Investing is like driving a car.

You got to know when to buy just like when to drive out from the junction joining the main road. It's all about the timing. Too fast or too slow, you risk being hit by the oncoming cars. The timing got to be right.

You need to know when to switch lanes. Time when you want to switch lane and put on the signal lights. Many drivers I see just swerve to another lane even when the cars are moving. And causing traffic jam at the back of that car. Because the car in front of him/her have already move on. And then sometimes, they turn back to their original lane because the road in front is already clear. Hard to explain here what I see often. Hope you know what I mean. And it is very irritating.

The lane switching worsens traffic jam. Every time.

You also need to know when to apply the brakes and stop the car.

I noticed the top/peak around towards the end of June, and was considering selling my investment in AmPrecious. Price reached a peak of RM1.022 on 21 June 2010. And towards the end of June, another peak of RM1.016 on 28 June 2010. Any price above RM1.00 is a good time to sell.

While any price below RM1.00 is a good buy. Price around RM0.90 is even a better buy. The price on 29 July 2010 was RM0.9109.

Looking at the gold price, and some charts, I fear the price now may dip further. Not sure how much though. Looks like another valley may form. Unless price moves up strongly again.

The MACD of weekly gold price chart is pointing downwards. The Stoch RSI indicator meanwhile is showing that we have reached a bottom. And is a good opportunity to buy.

We can get better confirmation to buy when the daily chart has positive indicators. The Full Stoch is getting to move upwards after weeks of staying at the bottom. So is the Stock RSI indicator. Once the MACD becomes positive, then it will be more confirmed that price is heading back upwards.

So, I am holding now at paper loss. And start to think where my mistake was. It was the 'exit strategy'.

I have forgotten the important advice in investment. Know when to exit when you buy. We got to plan when to exit. We got to know when to sell when the price goes up. We got to know when to cut loss when the price does not go our direction.

If you are looking to buy, wait for the opportunity. After this storm, we will see good weather again. Although I am confident price will be stronger next year, somehow I also fear the coming global market dip. Somehow, I don't know why, I can feel it. Not sure if people call this sixth sense. I feel something terrible is happening very soon to the world. The stock market will fall very soon in this second half. And this may affect gold like how it did in October/November 2008. The weakest point this year for stocks may be around August/September.

In another article I have mentioned that I see gold price around USD1,400 in August/September. Maybe the coming market crash will make investors fleeing from equities to gold. It is really hard to say. Whatever it is, I am ready to hold my investment for a long time until I achieve profit.

Seasonally, August and September are also slow months for gold price. I just hope the price does not stay down too long.

For those readers who have asked me to write often, thank you for your support.

Please leave your comments and thoughts on where do you see gold price in August/September 2010.

#218. Earn Cash From Gold Investment

Earn Cash From Gold Investment And Get Rid Of Debt Quickly

A Guest Post by Jason Holmes

In the past 2 years, the cost of living has become very high. The price of basic commodities has increased due to inflation. Therefore, if you are one of those Americans who are finding it extremely difficult to meet your living expenses and pay off your unpaid bills, then you can invest your hard earned money in gold and get rid of debt quickly by making a good profit. 

Invest in gold and earn money

Gold is one of the most precious metals. Among all the most precious metals such as silver, zinc, and copper, gold is the most popular and safest form investment. If you invest your money in gold, then be sure to make profit in future. The reason is the price of gold is increasing day-by-say. In July 2010, the price of gold has reached $1208.10 per ounce. So, you can very well imagine the amount of money you can earn from gold investment. The extra money that you'll earn from gold investment will allow you to get rid of debt within a shorter period of time. 

Most of the Americans hire a debt settlement/management company when they are unable to pay off their debt. But these companies charge a fee for their services. This implies that they need to arrange some extra cash. So, like most of the average Americans, if you have hired a debt management/settlement company to reduce your debt, then you can utilize this money towards paying the fee of these companies. Also, you can use this extra money to pay back your creditors. 

Types of gold investments

Let us know some of the primary types of gold investments: 

• Gold coins: This is the most popular form of gold investment. You don't need thousands of dollars to purchase gold coins. You can purchase gold coins and insure them. The insurance companies charge low premium rate on the gold coins.

•  Gold bars: You can invest your money in purchasing god bars and keep them safely in your locker. If you really need money, you can sell those and make a lot of money.

•  Gold mining stocks: You can even invest your hard earned money in purchasing gold mining stocks. If you purchase stocks of gold mining firms/companies, you can earn a lot of money when the price of gold increases.

 Key benefits of gold investment

Some of the key benefits of gold investment are given below: 

•   Gold is imperishable.
•   There is a huge demand for gold in the jewelry industry.
•   Generally, gold appreciates in value.
•   You can transport gold from one place to another easily.  

Finally, if you can invest in gold intelligently, then you can earn lot of money and get rid of debt quickly. Thereby, you can get back to your normal life and sleep peacefully.  

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like 'Credit Score The Quintessential Therapy for a Happy Pocket', Take Creditors and Collection Agencies to Small Claims Court' and, My Story- From Depression To a Smile'.

#217. Buy Gold At V Bottom

Click to enlarge the chart.

Buy gold. In the last article, I have said gold was on sale. It is still on sale. But don't wait too long.

You can see on the chart above, HUI Gold Bugs Index (which also mirrors the movement of gold price) has touched the blue line. And bounced back. Looks like the uptrend is till intact. It is swimming back in the uptrend channel.

And look at the indicator at the bottom - The Stochastic RSI. The brown spot has formed and completed. Price is moving up again. You can see in all the previous times where these brown patches appeared. Each time gold made a V bottom.

This is again a V bottom. A valley. A moment you have been waiting for. A time to buy. And timing is everything.

For example, the Amprecious fund price reached a top (shown as the green patch on Stochastic RSI) on June 21. This was a time to sell. I didn't sell and take out some profit. Price was RM1.022.

Then price dropped to the valley. Price on July 5 was RM0.9244. On July 6, it was RM0.9259.

You can calculate how much the price has dropped from RM1.022 to RM0.9244. That's a 10.5% dropped. So if you buy at this V bottom sale price, when the price moves up you may easily gain 10% within a short period of time.

But again, as said before. Hold it for long term. Of course, in between, if you want to sell and take out some profit. That's good also.

I am still confident price will move higher. My forecast is 700 HUI points in January/February 2011 timeframe.

Phase your buying as suggested in the last article if you are not comfortable buying lump sum. Buy at every valley. Sell at the peak.

Please study the chart and make your own conclusion. Price may go down. May go sideways. We never know.

Happy investing. To prosperity and beyond! Can't resist this one with Toy Story 3 being the fad with kids nowadays.

#216. Gold On Sale

If you are looking for the little dip in gold price, this is it. This dip is like putting gold on sale. Any dip in price should be looked as a buying opportunity. We are not done with the bull yet. Gold still has some peaks to scale.

I am still monitoring whether the price will dip further. And when is the golden opportunity to buy.

However, there is a strategy that I would like to share.

A little strategy I have learnt from someone is buying and selling in phase. Let's examine how this works.

As the price goes lower, you phase your buying. Spend 20% of your budget to buy. And as the price dips lower, another 20% and so on. Then when the price goes up, you can sell 20%. As it goes up further, sell another 20% and so on. Each time, make sure the portion you sell is making profit.

Let's say you split your purchase into 5 times (5 X 20% = 100%). It will be like this.

1st purchase - RM100
2nd purchase - RM95
3rd purchase - RM90
4th purchase - RM85
5th purchase - RM80

As the price goes up, you begin to sell in the same portion.

1st selling - RM85 (This will give you profit as you will be able to make RM5 profit from your 5th purchase of RM80.)

And so on.

2nd selling - RM90
3rd selling - RM95
4th selling - RM100
5th selling - RM105

Each time you make some profit. This strategy will help you to cash out the profit. This strategy is for those who say "You will never know when is the top and bottom."

What do you think of this strategy?

For those who analyse the chart. They will be able to see quite clearly the top and bottom.

The chart above is divided into three parts. The top part shows the Slow Stochastics indicator. The red and black lines move up and down. Looks like the black and red wires that we commonly see. It is now pointing downwards.

The middle part shows the daily gold price. It was taken down hard on Thursday 1 July 2010. On 2 July 2010, it turned upwards a little.

The bottom part shows the William's indicator. See the brown patch at the bottom? Every time a brown patch forms, it shows gold price is in the oversold area. It's on sale. A great time to buy and grab some. Stock them up, back up the truck.

There is no certainty in these indicators. Price may go down further. There are other indicators that we need to use. You can explore it here.

Some analysts are saying price will dip further since the price has climbed up so high. It's time to face some correction they said.

I am still feeling hopeful to see it hits USD1,400 in August/September. Or October. In that case, I think price will not dip too far down.

Also, there is quite strong buying as proven by the price turning up on Friday 2 July 2010. We will see how it goes in the coming week.

Tell me what do you think of the price direction. Going up higher, or can go lower.

#215. Gold Price At All Time High

Is It Too Late To Buy Gold Now?

Many months ago, friends around me were talking about gold price having gone up so high. They said it is now too late to buy gold. Well, what do you think?

I am not surprised anymore now when gold hit another all time high. On 18 June 2010, gold price reached an intraday high of USD1,262.40. Gold will keep climbing higher and breaking its own record.

As I have mentioned on 24 May's article #213. Buy Gold At The Valley, gold may reach USD1,400 in August/September. Thereafter, USD1,650 in 2011 is not a surprise too.

Even when price continues to climb higher, there is still always opportunity to buy. Look out for every valley along the way. Grab the chance before the train leaves the station forever.

And those who think that price is too expensive now, wait till they see what next year's price is going to be. It was like in 2008 when I kicked myself for not buying in 2002. I am staying invested for longer timeframe this time. The technical indicator shows that there is still more upside room for price to climb higher within the next few months albeit reaching a high now.

With gold being in long term bull trend, you will not see me commenting much on the Malaysia KLCI or even Asian or China funds. My focus is now on gold trend.

Also, I am waiting for the HUI gold bugs index to climb higher. Gold price has reached all time high, but this HUI is still not. So, I guess, there is still hope for it to reach higher.

Hoping you all have a fat 'bonus' and profit this year.

#214. Gold Bugs Index HUI Chart

On May 24, 2010, in article #213. Buy Gold At The Valley you were shown that price was in a valley.

Today, at the point of writing, gold price is around USD1242.

Another chart that I look at is the HUI or Gold Bugs Index. If you invest in gold miners stocks via AmPrecious Metals Fund, this chart is a good indication too. Anyhow, the trend follows the gold price closely.

The HUI Chart is shown above. Around May 24, the index was at 430 level. In the chart above today, it is at 482.82. If you have caught the bottom at 430, you will surely see a good profit at the moment.

My own forecast for this Gold Bugs Index is around the 700 mark by January 2011. Crossing my fingers. Don't treat this as an investment advice. This is purely my thoughts. Don't hold me liable for anything. Do your own diligence.

I was away on vacation overseas for the first two weeks on June. Some people had called me on my mobile phone. I apologize for not being able to talk for long over the long distance call. I wanted to avoid the hefty phone bills.

Now that I am back in KL. Please send your email and leave your comments here if you have any questions for me.

Happy gold investing.

#213. Buy Gold At The Valley

Buy At The Valley, Sell At The Peak

The image above is not so clear. I am not using my usual computer to edit the picture.

This is a candlesticks chart of gold price in USD. On the right hand side, you can see two blue candlesticks. This is showing that it is going up. After many days of the price dropping, finally we are see the price moving up again.

Overall market sentiment this morning in the East also seems to be recovering. Stock markets are in green again.

Some readers have asked when is the valley to buy gold. If you are looking for a valley, this is it. Buy and keep for a long timeframe. Don't sell it. This is going to be a long term investment.

The chart above shows only a few months. But if you see the bigger picture. The price is in an uptrend and the price has dropped to the bottom point of the channel.

There is a blue line moving upwards in the chart. You can see that price has reached the line and bouncing up again.

For what it is worth, I have put in order to buy some AmPrecious Metals Fund today. Please do your own due diligence. This post is not an investment advice. You make your own decision, ok?

Some say price is expensive now and they are waiting for it to come down. Comparing to what the price will go to in the future, I think it is cheap now. And I will be holding it for some time. You will not see me advising selling gold on this blog that often anymore. I will only advise on buying each time there is a dip. This is a long ride to the moon.

I am forecasting price to go up to USD1,400 in August/September. And as Jim Sinclair on jsmineset.com keeps saying, price will be USD1,650 in January 2011. And Sinclair is very confident about this price level.

This time, I will be holding my purchase for a longer timeframe. Till January 2011 or further. But certainly depends on how the price trend moves.

As long as there is a lot of bailout of countries in default like Greece, we will see more people interested in gold. Some say Spain, Italy and Ireland are next. And even California is already nearing that stage and needing the USA's support.

With more money printing to help the countries in Europe, we will see gold going up further. Many fund managers in the West are advising their clients to put money in gold. Wealthy fund managers themselves too are buying gold. And even Central Banks are buying gold. This is the reason why I am buying gold too. And not other stocks.

I also read a billionaire has fully invested into gold. He has lost confidence in the fiat currency and stocks.

Happy investing. May you become healthier, happier and wealthier.

#212. Bank Negara Investigates The Gold Label

Reported in biz.thestar.com.my on 7 May 2010.

KUALA LUMPUR: Bank Negara is investigating The Gold Label Sdn Bhd on suspicion of conducting illegal deposit taking and money laundering activities.

This is in breach of subsection 25(1) Banking and Financial Institutions Act 1989 and subsection 4(1) of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 respectively.

The central bank said in a statement that the raid on The Gold Label was conducted yesterday at its premises in Kuala Lumpur following complaints received from members of the public.

“Relevant assets and documents of the company were seized for purpose of investigation,” it said.

Carson writes:

Don't buy gold from any party except from those you see in big shopping malls. And of course, from the banks.

Better be safe than sorry even though they promise great returns. They come back again and again in different names. Please see another gold article and the comments.

Later, after the investigation, and when nobody is charged, some of you may say "see, it's safe." Well, if there is no wrongdoing on their part, then why are they under investigation in the first place? Think about it. Have you seen Bank Negara launched investigation on Public Bank or Maybank? No.

#211. A Breakout In Gold

Gold Climbing Up

Gold price was at USD1,113 per ounce when I wrote on 16 February 2010.

And then gold headed up to USD1,134 on 7 March 2010.

So, where are we now?

It's at USD1,165.44 as I write this. Public Bank Gold price is also doing nicely at RM123.39 (selling) and RM118.61 (buying).

Using some technical indicators, I spotted the valley around 25-26 March. My friend bought on that date after consulting with me. Lucky him. If the price continues to rise, he will make a little profit.

Meanwhile, I am not doing too well in an Asian fund that I have bought from Fundsupermart. Cut losses yesterday. Using the Exponential Moving Average indicator, it's time to sell.

That's the danger of buying at the wrong time. And I have always said, it's about the timing. I bought midway when the price was heading up. Being greedy (another no-no in investment) and thinking it will go further up. But stocks around the world now are diving.

There will be opportunity later to buy again when it reaches the valley.

I am still holding on to the AmPrecious fund. Waiting to see a little pullback to add more with some fresh ammo.

Another story...

A friend sms-ed me and said that she has become a unit trust consultant with Public Mutual (another one.. hehe). Almost everyone knows some Public Mutual agent, yes?

And the sms said that if I want to invest in unit trust, contact her. I politely replied to her that the sales charge at 5% is too high. I rather go with Fundsupermart for cheaper sales charge. And I also told her I managed it myself.

I hope she uses charts to find the valley when advising clients to buy. Otherwise there will be heartaches when people see their investment dropping.

Meanwhile I have spotted a good fund that climbed strongly when the KLCI was heading upwards. It is Prudential Master Trust - Prudential Small-Cap fund. Year to date, it has made 13.74%. Not bad.

But now is not the time to buy. The market is falling now. Got to wait at the valley. The people following fundamentals will say it's the trouble brewing in Greece causing market to dive. Whatever it is, I just stick to chart analysis. Some simple indicators like Williams, Stochastics and Exponential Moving Average will already tell you when is a good time to buy and sell.

Good luck in investing. Let me know what funds are you holding now. What funds have made nice profit for you. Share it with the readers.

#210. Gold Price Heading Up

So Glad That Gold Price Is Swimming Up The Channel

From my last update on Gold Price trend, dated 16 Feb 2010, price has now gone up further.

In the last article, gold price was around USD1,113 level. And it was showing signs of breaking out of the downtrend channel.

Today, in the gold chart above, see how an uptrend channel has already formed. Price has closed at USD1,134.60 on Friday, 5 March 2010.

The blue arrow points at where the gold price has moved out of the downward trend. See how it broke out of the downward diagonal line like a small plant shooting out from the soil.

Let's hope it continues swimming in this uptrend channel... and also hoping for a bigger upward run. Hehe, greedy me.

Some analysts foresee a new high to form soon. Well, for me? Just going with the flow at the moment.

Those who have bought in February can now see a bit of profit.

See you at the peak.

#209. Gold Price Up Again

Gold Price Up Again!

Gold price has gone up again.

The chart above shows the green line 10 Days Moving Average Exponential technical indicators. You can see the gold price has broken above the green line - pointed at the big red arrow.

Price is now moving upwards. That means we have reached the valley some days ago. Can you see it? The last few days have also seen the price in blue candlesticks. Blue candlesticks means price closed higher than its opening price. It shows an upward trend.

Other indicators have also shown gold price going up. How high will it go? I can't predict that. Will just follow the indicator to tell me when to sell. Will post again when it's time to sell.

Happy buying and investing.

#207. Current Gold Price

Where Is The Current Gold Price Direction

Today's gold price is dipping. The price has been dipping since evening of 20 January 2010. I didn't give a sell signal. Why? Learning from last year, it is wiser to hold on. And buy at every dip when it is on an uptrend. We are still on a major uptrend in gold price.

Furthermore, I have just bought at the valley in early January 2010. Gold price has gone up soon after I bought and reached a peak in the mid of January. Meanwhile the US Dollar was descending down the stairs in the same period.

I bought the AmPrecious Metals fund that invests in gold mining stocks in the USA. Since the USD went down even while gold price went up, the gold price's climb seems to be cancelled out by the declining dollars (when you translate it into Ringgit). Didn't make any profit at all although price has gone up. You may be experiencing the same thing.

In that case, just hold on. Gold price will dip a little and will climb up again. Gold price is behaving like this recently as I have mentioned before. It will move in bigger waves of ups and downs. We just got to ride these waves. Buy low, sell high. Catch the timing.

The current gold price may have a few more days or a week more to run its course. Down. After that, it's time to buy at the valley again. From the past few months' records since September 2009, price always rose at the beginning of the month (which also coincides with the full moon). If this is the trend, we might see the full moon on 29/30 January 2010 effecting the gold price again. Still, it will be best to keep your eyes on the charts. Charts will tell you for sure whether it will go up or down after the full moon day.

I will buy more when it dips to the valley. Will post again when the price has reached the valley. Don't miss it. Come back often to keep updated on the current gold price situation.

#204. Gold Price Up

Gold Price Has Shot Up, Time To Buy Now

Gold price has shot up on 4 January 2010, the first Monday (and trading day) of the year. This is a good sign, perhaps showing us the gold sentiment that people have for this new year 2010. It may also gives us a hint of the gold trend for the rest of the year.

Using some indicators, I can see that gold price has bottomed on the daily chart. Thus, gold price is ready to make a trend reversal. The indicator has now showed a clear uptrend is forming and gives a buy signal.






The daily chart of AmPrecious Metals Fund has also shown that price is ready and ripe to move up further. It has hit the support line of the uptrend channel that was formed in 2009. I was not bold enough to buy exactly at the valley when I saw it a couple of weeks ago. I was waiting for the buy signal.

Today the buy signal has confirmed that the gold price is now moving up. Never mind if I make a few dollars less if I had bought exactly at the valley. To go with the price trend is more important.

Will the gold price go up? As I have always said, time will tell whether I am right or wrong. Please do your own due diligence. Be your own investment guru and decide for yourself whether you want to buy today.

I am not here to convince anyone to buy gold. I am merely seeing this as a good timing to buy. A good timing is always the key to making profit.

#201. Gold Peak And Valley 6

Take Profit Now For Gold, Sell

If you are still holding gold, this is the signal to sell now. Take your profit now or cut loss. There is always another day to buy at a cheaper level.

The weekly chart is showing a downward turn. In article #198 about gold investment, I mentioned that the weekly chart has a support at USD1,115.93. The price has closed below that support on Friday 11 December 2009 at USD1,114.55. This is my signal to cut loss and get out. No ifs, ands or buts.

When the daily trend is down, followed by weekly trend is also down, we should not be in the market. It is selling time.

Oh well, market is always there and patience is a virtue. Let's wait for a more opportune time to pounce again.

I may be wrong, heck. The price may turn up sharply right after you sell. Make your own decision and don't follow me blindly. I am just saying what I see from the indicators.

#200. Gold Peak And Valley 5

Another Round Of Opportunity To Buy Gold Is Coming Soon Or May Be Even Now

The gold hourly chart

The above is the hourly chart of gold. The price reached the peak on 3 December 2009 and then dipped. Last night (10 December 2009), around 10:00pm the price broke through the top resistance line at point A.

Since then (point A), the price has been slowly trending up.

I think the correction is over. This is my guess.


The gold daily chart

Next, you can see the daily chart below.

There are a few things that we can see from the daily chart. As I have frequently said, a chart is an important tool. It tells a lot of things. A surgeon refers to x-ray and MRI scan. A sailor refers to his map. A violinist refers to his musical notes. A backwoodsman refers to the footprint tracks on the ground.

A good chart shows the tracks of the bears and the bulls. Let's see where the bears and bulls are.

1. While the climb up to the peak on 3 December 2009 was steep, the dive after that was steeper. This steeper the trend (whether it is up or down) means the sentiment is strong. If the dive down is very steep, it shows the bearish sentiment is very strong.

A steeper trend also shows that the move is always a panicky one. And the trend will not last very long. In this case, we see the steeper down trend has happened in shorter time than the climb up.

Picture yourself sliding down from a hill. The steeper the slope, the faster your slide will be.

2. The blue resistance line at the bottom is holding up very well. And I have also mentioned that we will see the third triangle forming. The last triangle is now clearer.


What happens next?

What next is everybody's guess. Whether we will drop further, or climb up higher.

Nevertheless, you can see the blue resistance line is in an uptrend showing that once the correction is over, we will continue the trend up higher.

Only if the price drops further and crosses the blue line then we will see the danger of further down trend.

Those who are still waiting to invest in gold, you may get ready. If you have high risk tolerance, you may even start to buy a small portion now.

As always, let me say, my guess is as good as yours. Do your own analysis and make your own decision, you are the investment guru.


200 articles

Unit-trust-investment.com has reached 200 articles!

Thanks to the support from you. Your comments and emails have motivated me to keep writing. To keep this site going on.

It's not monetary rewarding writing articles here. No donation pouring in even from readers who have made good profits (haha). Not much money made from advertising on the page.

But that is not important. I found that by putting my thoughts on writing, I am able to constantly focused on how to improve my investment. It keeps me searching for answers. As you have witnessed, we have moved from gold investment account to a more profitable gold miners unit trust fund. The coming 2010 year is going to be a very rewarding year.

It's not about the money. I am happy doing what I love. Investment and writing. I strongly believe that anyone who loves what they do will be successful. The reward will come later. For now, my aim is to make more accurate investment moves (the right time to buy and sell). Looks like a new year resolution. Yes, it sure is. Trade right and the profits will come.

In investment, it's not about how big a profit you want to take. Market does not move with you. I read in a magazine on investment, there are still people who invest and say "Right now my portfolio has grown 17%, I will take profit when it reaches 25%." Timing is more important. If 17% is the peak, then you must sell. The market does not move up further till 25% for you. You have to follow the market. And if the market can move up further to 30%, go with it instead of just stopping short at 25%.

In addition, talking on focus, I have also constantly sought out ways to improve the timing to buy and sell. I believe I am making progress in this area. You can see that I have abandoned the old unit trust investment method (buy-and-hold hoping for 13% per annum returns) and moving towrds smarter strategy. (buy-and-sell making more than 50% per annum returns).

Well, we will just see how it goes next year 2010.

#199. Gold Peak And Valley 4

Tetrahedron Revisit

In part one, I showed the possibility of gold making the triangle (see below). That was on 27 November 2009.

Today, the gold price looks like it is going to make the triangle.

Let's wait for it to make dip to the valley projected around USD1,080-1,095 area. Once the triangle has closed its gap, we will see price rebounding higher this time. It's good to buy at the valley nevertheless. Always buy at the valley especially when it hits the trendline (blue line). Reversely, always sell when the price hits the top of the upper trendline when it shows an inverted V.

Anyway, this is just my projection. I may be wrong. Price may go below the lower blue trendline. If that is the case, we just have to see how low it goes before making the V.

#198. Gold Peak And Valley 3

The Weekly Trend Is Still Up

Gold closed at USD1,150-1,160 level on 4 December 2009 night. This morning the indicators are all signalling to sell.

However, it has not reached my cut loss level yet. I am still holding with the view that the weekly trend is still up. When weekly trend is still up, it shows that the bullish sentiment is still holding up. For now, the weekly trend has to drop below USD1,115.93 before we declare a bearish trend.

Selling now would mean buying back later at a lower price. Selling my AmPrecious fund within 30 days would mean a 'penalty' charge of 1%. Buying back later would mean paying another 2% sales charge. Only if I foresee a drastic drop bigger than 3-5% will I sell now. Otherwise it is not worth it to sell now.

Why am I not seeing a big drop, yet? The morning session in Asia is showing gold stabilizing at the USD1,150-1,160 level. If there is a major sell off, we would have seen the Asian market continuing the trend seen on Friday (4 December) night. This is not the case. Buying is still strong I guess. No major sell off in Asia.

Also, the USD Index has shown a slight increase. This has somewhat cushioned the fall in AmPrecious fund price. On 3 December 2009, the price was RM1.0931. On 4 December, the price went lower to RM1.0697. That's a drop of about 2.1%.

Nevertheless, I am not able to say how low the valley will be this time. One thing is sure though. Daily price movement is becoming bigger and bigger as I have mentioned in article #182 regarding the Fibonacci theory. Because of the large daily price movement, it really gives us the heartache when we buy in the morning and see price dips lower in the night during the USA market time.

Let's continue to watch and monitor the price for the coming days. For the past two Fridays, price has come under attack. Mondays and Tuesdays will show some indication of how the trend is going to be for the week. Let's see how it goes.

#197. Gold Peak And Valley 2

Weekly Trend Is Still Up

Gold has moved up again just after 2 days of down time. This clearly demonstrates the power of the bulls.

And looks like the valley that I was expecting is smaller than I thought.

Gold reached all time high at USD1,201.50 in the early hours today. USD1,200 is a psychological resistance and this is now breached. This will give confidence to more people to feel bullish. This will also move gold up higher in the coming weeks.

In the previous article, I mentioned those who are still at the sideline to get in when the price dips. Those who have sold and taken profit, come back in for another ride.

This is now the time. However, please do your own due diligence. This is a risky sport and you have to decide for yourself. You are your own guru.

#194. Gold Peak And Valley

Gold Is Making A U-Turn

Day after day gold tirelessly climbed higher and higher. Each day, a new record high is achieved.

However today, my indicator has shown that gold is now taking a breather after all that climb. Those who has bought may want to sell to take a profit. The weekly trend is still up (more on this later) and you may hold.

The chart above shows the Daily Trend is making a sharp U-turn. You can also see 3 triangles bringing back memories of the Tetrahedron theory. Once the last big triangle is formed, we will see gold spring up again massively. That's just my theory and view. I may be wrong.

Those who are waiting at the sideline to join in can wait to board the gold train later. Just wait for it to reach the valley first. No hurry. Just be patient.


Weekly Trend Vs Daily Trend

Here is a tip to share with you that I have learned from an investment book.

When the Weekly Trend is up and the Daily Trend is down, buy.

Let's just wait for the Daily Trend to reach the valley, then load up your gold.


Good luck in your investment.


Updated at 12:06 AM, 28 November 2009:

Gold price stands at USD1,180 as I write. The Dubai news has caused panic selling. Gold touched the low of USD1,137.75. Truly amazing that it moved back up to USD1,180 so quickly. The strength of the bulls and faith in gold is really still there.

Keep watching the trend. They are the footprints of the bulls and bears running together. Looks like the bulls are leaving deeper footprints for now. Still, be cautious and keep a watch.

See how the price opens on Monday, 30 November 2009.

#192. Maximize Your Profit In Gold Investment

Learn How To Make 98.75% Profit While Gold Only Appreciated 30%

The above chart shows the 2009 (till 17 November 2009) price trend of AmPrecious Fund and Gold price. Gold price is shown in US Dollars while AmPrecious price is recorded in Ringgit.

Gold price is shown in red line and Amprecious is the black line.

Gold price closed on 2 Jan 2009 at USD874.50, and on 17 November at USD1,134.75. An increase of about 30%. However, the actual increment may be smaller when we convert it to Ringgit because of the drop in value of US Dollars this year.

AmPrecious on 2 Jan 2009 was at RM0.7074, and on 17 November at RM1.0249. An increase of about 45%.

There are a few observations to share with you:

One, AmPrecious moves up and down in trend similar to Gold.

Two, while AmPrecious dances in the step with Gold, the magnitude is slightly larger. This might make AmPrecious a better investment than Public Bank Gold itself.

Three, we are still in an uptrend in Gold. Hence AmPrecious will trend higher too.

As I have written in an earlier article. We need power to maximize our profit. Look for the best investment vehicle to achieve our target (profit) faster.


A.S.K.

Although the return is good, I believe we can get more if we adopt the buy-and-sell strategy. The buy-and-hold strategy will give you the returns mentioned above. The buy-and-sell strategy will give a return that is more than double that.

The law of attraction that is currently told in some latest books is not something new. Long before this became popular, I have known from an old book about this concept.

I am not religious (nor am I a Christian), just an avid reader that read a lot of books. One of the books that I have read is the Bible. I read to learn some knowledge in it. This is what I found long ago when I read it (Matthew 7:7):

Ask, and it shall be given you;
Seek, and ye shall find;
Knock, and it shall be opened unto you.

Since my mind is continuously questioning and asking how to get more, I chanced upon an investment guide book. This book shows some techniques to enter the market at the right time.

Whoever that says we can't time the market, they may not know about the techniques that many people are using successfully. Either that or they are from the unit trust industry. Hehe. They just want you to buy and hold and stay invested with them. Although logically they would make more if they promote buy-and-sell since they earn more sales charges each time we buy.

After obtaining the whole 2009 year's data from Fundsupermart, I backtested the technique on the data. To my amazement, as of 17 November 2009, the technique returns an amazing gross profit (not yet deduct the sales charges) of 98.75%!

In the last article, you read about the importance of stock charts. Now you see. Without chart, we will only make a profit of 30% if we are in a lucky uptrend. With a chart in hand and knowledge of some techniques, you will make even more!

I feel so excited when I discover this. After sharing with some close friends and relatives, I understand that many people will be skeptical of it. Therefore I am not prepared to release this in public. Will just keep it with me for the time being.

What I will do however is to publish my timing here whenever I buy and sell. That way you can follow to see if the technique really works to make great profits. Nevertheless, a disclaimer is a must here. Follow at your own risk. It should not be taken as an absolute investment advice.

The friends and relatives that believe in what I said, are now ready to follow my cue to board the train at the next valley station.

Those that are going to ask me what technique I use will not get an answer. I won't reveal the answer here nor in emails. Hope you understand. No free lunches. Also, I cannot guarantee that this will work in 2010. We will see how it goes.