Articles for: XJO

A diversified approach is important in any investment strategy. There are varying levels of diversity from Macro to Micro levels. It is commonly accepted that using a combination of property, stocks and cash is a sound diversification strategy on a macro level.

Trading a break of a trend line is one of the oldest technical trading methods around. Like all trading signals, it has its share of false breaks. However, there are a few simple methods to help weed out these false signals.

There is near unanimous consensus amongst all in the investment community that stocks are currently very cheap. Having said that, there is little agreement on whether or not now is the time to get back into the market; sure, stocks are cheap, but will they get cheaper still? And that’s the 64 million dollar question: when is the right time to position ourselves for a recovery?

Back in March when the markets took off there were many reasons to believe markets globally could have fallen much further. So few investors got on board as risks were still high. Many traders – short term players – may have taken some positions but few would have been fully invested. Well done if you picked the low.

If the possibility of a market downturn has you worried, you might want to consider purchasing some insurance for your portfolio. Here I am referring to a process called ‘hedging’, which ensures that your downside risk is limited by purchasing a financial instrument that will offset any loss incurred in your portfolio.