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Happy New Year To You

We have ended year 2009 and how time really flies.

How much has your investment grown? Hope you have gained and not lost in the year of 2009. It's been a wonderful year. The stock market is up. The gold is up. Many people have gained a lot in 2009. It's truly a golden year.

Wonder what is in store for us in the year 2010. There are plenty of economic forecast for 2010 on the internet. There are also a lot of gold forecast for 2010.

Taking the lessons learned in 2009 into 2010

In the year 2009, I have to admit, I didn't gain much in my gold investment. You may say I have missed the greatest opportunity in my life. I have relied too much on so called gold news and information and gold forecast. However, in the KLCI investment, I have done quite well showing that the trend is going up because I followed the chart.

From experience, I have found that the news, information and forecast are as reliable as a broken clock. They are not accurate. Following it is simply putting your investment at risk. They are forecast by humans like you and me. As humans, they surely have a lot of inaccuracies.

Therefore, it has prompted me to re-evaluate my strategy for this year 2010. Three important things to bear in mind for 2010.

One. It's best to be your own investment guru in 2010.


Two. Study the charts. If all the humans giving out forecast and information are wrong, who do we follow then? Why, the most accurate thing is the chart. Of course!

The charts never lie. They show you the trends. If the trend is moving up, it is certainly moving up. Forget what the news tell you. Go with the flow of the trend. If the trend is ready to make a reversal, it certainly is. Ignore what the news tells you. Just follow the chart.

The chart is a collective reflection of the market participants. If it is a gold chart, then it is a collective activity of the buyers and sellers of gold. Their action of buying and selling, and their feeling of bearish and bullish are what make the chart ticks. The collective buying and selling of these people move the charts.

What else do you want to believe if not the chart? The chart is something that is truly like the evidence left in a crime scene. Every step the criminal (buyers and sellers) makes is left on the trail of the price trend.

More importantly, the chart tells it the way as it sees it. It captures every moment of history, every moment of the interaction between the buyers and sellers influencing the price. They are certainly the oracle that we should follow instead of the news and forecast put out by individuals.
Timing is still everything.

I am a firm believer that everything under the sun happens for a reason. And because it happens for a reason, there surely is an invisible hand in timing making all these things to happen at the right time and at the right place. Timing is indeed everything, even when it comes to investment.

Many are still arguing that we can't time the market. They rather read the news. How accurate is the news? Read the newspapers in the beginning of every year. The so called economist analysts always say things like "We may see a grow in the stock market if the rates are not raised." See what I mean? They use words like 'may' and 'if'. They are not certain on what they are saying. I treat those news as merely knowledge. At best, you now know that if the rates are not raised, then we shall see the stock market moving up further. Still, the stock market is influenced by 101 factors. That piece of information is totally unusable when the other 100 factors come into play. And then the economists will put out other reasons for why the market move up or down.

Again, referring to the strong point of number two above. It's important to dance with the tune. Invest in perfect timing to the beat of the market. Follow the ups and downs to make the most out of it. Knowledge of these perfect timings don't come from reading the news, they only come from following the charts. Like a good hunter tracking the bear's paws prints on the ground, the good investor tracks the price trend on the chart.


Staying focus

With the above three points, I am making a resolution to improve the profitability for my investment in 2010. And to continually striving for improvement in reading the charts. Hope the readers can benefit from this journey and contribute their knowledge as well.

Happy investing for 2010.