This week, I have opened a futures trading account. So far, I have longed a futures contract, and short a futures contract. From my experience so far, futures trading is more geared towards short-term. There are two reasons for this statement.

The futures contract are short term in nature. 1 month, 2 months, 3 months or 6 months contracts. Unlike company stock whereby you can hold long term for dividends and capital appreciation.

The tools used are mainly charts, like the candlestick chart. People track these weekly, daily or even hourly charts.

It seems to me futures is like a gambling tool. Betting on the direction of the index or prices. It’s different from investing, like buying stocks, which is actually buying a part of the business.

Stock Performance Guide Malaysia, is a must have book if you’re a stock investor, with an affinity towards numbers.

I bought this book about 2 weeks ago. I didn’t realize the potential of this book until last night, when it opened my eyes.

The stock market downturn in the last few days has presented a good timing to buy into new stocks. Well, at least I thought this downturn is only a correction and our stock market will head higher and now is a good time to buy some stocks.

I stared at my stock trading console. Not knowing where to begin. I couldn’t rely on my previous analysis techniques because quite frankly, my portfolio value was declining in a bull run. Go figure. Neither could I rely on rumors, because it was already too late by the time I knew about the rumors. I was at a lost.

Then I remembered this Stock Performance Guide I bought two weeks ago. I took it out. Flipped through some pages. And it suddenly dawned onto me that within the pages of this book, is an unbiased source of data and information that I could use. I could check out the performance of companies dating back to 10 years ago. I could see which companies are cash cows.

I wished I had bought this book at least one year ago, when the stock market was falling. Then I would have ample time to study the different companies, understand the types of businesses these companies are involved in, understand which companies consistently delivers to their shareholders and so on.

If you are a numbers person, you must get this book. With this book, you will have another unbiased tool to help you make better judgment.

Today I bought some unit trust by dipping into my EPF. The EPF allows its contributors to use some of their money in Account 1 to invest in approved unit trust funds.

I made this decision mainly is because of two reasons. The first reason is that the stock valuation is cheap due to the global recession and economic slowdown. What goes down must come up again. The economy will stabilize and pickup. New jobs will created. Demand will revive and companies will continue to make more profits.

The second reason is that the returns from the unit trust will be higher than the dividends given by EPF. Of course, the high returns from unit trust can only be obtained if I buy low and sell high. Which is why now is the best time to use my EPF money to buy unit trust. If I had bought my unit trust at high valuation, like two years ago, then I’d be making a loss now instead of profits.

Ideally we should take money from EPF and invest into unit trust funds when valuation is low. And when valuation is high, we sell the unit trusts and put the money back into EPF. Then wait for the next market crash. If this can be repeated over the many economic booms and busts, then we’d be able to enhance the size of our retirement fund substantially.

I started buying stocks in June 2008. It’s been six months now and I did a review of my performance. Here’s the results.

Capital: RM40,000. Transaction costs RM1,500. Current portfolio value: approx RM36,000. This means a loss of about RM4,000.

I have accepted that it is impossible to time the market. I also didn’t realize that I had incurred up such a huge transaction costs. From now onwards, I’m only going to buy fundamental stocks. Buy and hold.

With all the bailouts here and there, people are saying bailouts have cost US tax payers more than a trillion dollars. Just how much is a trillion dollars? I found this simple article and illustrations that help me understand the magnitude of a trillion dollars. Check out for yourself, “How Does One Trillion Dollars Look Like“.