A little on my background: I’m from the financial industry (one of the top 10 largest funds globally). Years in stock market: 8. Financial Literacy: 9/10.
There’s much being discussed on ETFs and robo-advisory here. I’d like to share something more niche and unconventional – which is ramping up capital aggressively for investments and channeling the profits towards investments for the medium/long term and the following are based on my experiences.
Basically to sum it up, the 1st goal: Aggressive growth of capital. 2nd goal: buying into stocks for mid/long term investment horizon.
2020:
Riding on the trend
Made a comfortable profit by using “free money” – Riding on the glove stocks trend, I bought on T+2 trades for glove stocks (Top Glove and Supermax). Made profits without forking out much capital and sold mostly within T+2 trades. Did this for a couple of months and it was profitable 80% of the time. You’ll need a Plan B, such as have enough capital to take up the shares just in case. They were short term trades and I managed to exit as soon as vaccines rolled out.
Zero Diversification
For this strategy, the conviction has to be as accurate as possible. The returns of diversifying into 5 stocks yields lesser returns, which of course risk and rewards are at stake. From all the profits from the two glove stocks and additional capital, went all in for MR DIY in Nov/Dec 2020 at RM2.87. Sold all of it at RM4.10.
https://preview.redd.it/xzaiz279n4u...bp&s=abbba4f39305dcc4262b84486d80de9d983573f7
2021:
Aggressive Growth of Capital
https://preview.redd.it/tmq2piqsn4u...bp&s=951e609fb7afb66a2c13834fe1c5f6a9d06b683b
The US stock market has always been on my radar since early 2020. Taking ETFs, robo-advisory and dividend stocks such as REITs into consideration, the past 5-years and 10-years performance does not fit my criteria of aggressive capital growth.
Entering into riskier trades is the fastest way to ramp up capital and double up. Aware of the risks involved, I only deployed money that I am ready to lose. Started some trades in commodities in May as the hot topic globally was inflation. The best hedge to ride on inflation is commodities such as gold. As the trades were at 20X leverage, made it a point to not hold it for more than 24 hours (also to avoid the min. fees for leverage).
From my relatively short experience in trading commodities (started in mid-May and stopped in June), it’s imperative to have discipline on:
https://preview.redd.it/vu8usbw6o4u...bp&s=b32b355507f1a1587a8f5f989ba1401c14273b01
From the profits and monthly DCA, I channeled them to medium and long term investments into only 6 stocks and currently sitting on unrealized profits (gain porn):
https://preview.redd.it/76cudk8ao4u...bp&s=5a542c78a518807bdc1438883fdd902a1fc944be
However, it’s not all roses as I am also sitting on some unrealized losses for 2 stocks (loss porn):
https://preview.redd.it/lutd0prdo4u...bp&s=045937efd9dc72778ee94ba763eb1e24fc989564
Don’t plan to cut loss for now as I see potential in them to grow 2-5X in the next 2-3 years.
The reason I’m sharing my experience is that I’m pretty sure some of you might have once contemplated on this this strategy of ramping up capital aggressively and channeling the profits to medium and long term investments. It’s been tried, tested and worked.
Key considerations to take into account:
Friendly reminder: Past performance does not indicate future results. This strategy is more suitable for those who have better understanding of the markets.
There’s much being discussed on ETFs and robo-advisory here. I’d like to share something more niche and unconventional – which is ramping up capital aggressively for investments and channeling the profits towards investments for the medium/long term and the following are based on my experiences.
Basically to sum it up, the 1st goal: Aggressive growth of capital. 2nd goal: buying into stocks for mid/long term investment horizon.
2020:
Riding on the trend
Made a comfortable profit by using “free money” – Riding on the glove stocks trend, I bought on T+2 trades for glove stocks (Top Glove and Supermax). Made profits without forking out much capital and sold mostly within T+2 trades. Did this for a couple of months and it was profitable 80% of the time. You’ll need a Plan B, such as have enough capital to take up the shares just in case. They were short term trades and I managed to exit as soon as vaccines rolled out.
Zero Diversification
For this strategy, the conviction has to be as accurate as possible. The returns of diversifying into 5 stocks yields lesser returns, which of course risk and rewards are at stake. From all the profits from the two glove stocks and additional capital, went all in for MR DIY in Nov/Dec 2020 at RM2.87. Sold all of it at RM4.10.
https://preview.redd.it/xzaiz279n4u...bp&s=abbba4f39305dcc4262b84486d80de9d983573f7
2021:
Aggressive Growth of Capital
https://preview.redd.it/tmq2piqsn4u...bp&s=951e609fb7afb66a2c13834fe1c5f6a9d06b683b
The US stock market has always been on my radar since early 2020. Taking ETFs, robo-advisory and dividend stocks such as REITs into consideration, the past 5-years and 10-years performance does not fit my criteria of aggressive capital growth.
Entering into riskier trades is the fastest way to ramp up capital and double up. Aware of the risks involved, I only deployed money that I am ready to lose. Started some trades in commodities in May as the hot topic globally was inflation. The best hedge to ride on inflation is commodities such as gold. As the trades were at 20X leverage, made it a point to not hold it for more than 24 hours (also to avoid the min. fees for leverage).
From my relatively short experience in trading commodities (started in mid-May and stopped in June), it’s imperative to have discipline on:
- Stop loss (the margin of error has to be minimal as positions were 20X leverage).
- Not holding for not more than 24 hours.
- Be very sensitive to economic data and news. From June onwards, the tides have turned as the Fed claims inflation is “transitionary”. IMHO, inflation is not transitory. But the market thinks otherwise and the tides have turned to other asset classes.
- Logic over emotions. It was relatively stressful trading commodities and was the stress worth it? Kind of. But I don’t think I would want to repeat it again as I appreciate a good night’s sleep.
https://preview.redd.it/vu8usbw6o4u...bp&s=b32b355507f1a1587a8f5f989ba1401c14273b01
From the profits and monthly DCA, I channeled them to medium and long term investments into only 6 stocks and currently sitting on unrealized profits (gain porn):
https://preview.redd.it/76cudk8ao4u...bp&s=5a542c78a518807bdc1438883fdd902a1fc944be
However, it’s not all roses as I am also sitting on some unrealized losses for 2 stocks (loss porn):
https://preview.redd.it/lutd0prdo4u...bp&s=045937efd9dc72778ee94ba763eb1e24fc989564
Don’t plan to cut loss for now as I see potential in them to grow 2-5X in the next 2-3 years.
The reason I’m sharing my experience is that I’m pretty sure some of you might have once contemplated on this this strategy of ramping up capital aggressively and channeling the profits to medium and long term investments. It’s been tried, tested and worked.
Key considerations to take into account:
- Sound understanding of the market, economic data, the Fed, politics, the flow of money/switch of asset classes according to expectations of the market.
- Accuracy of trades and calls.
- Use only money that you are ready to lose.
- Due diligence on the stocks you’re buying for medium to long term investments (and review periodically if you need to change your positions).
- To gage whether are you doing the right thing - always use S&P index as the benchmark. If you are outperforming the benchmark, it indicates you are doing the right thing. If not, you're better off buying index funds.
Friendly reminder: Past performance does not indicate future results. This strategy is more suitable for those who have better understanding of the markets.