I have written a little about the current economic climate, investing and a little on currency trading. My readers of course need to judge by themselves what suits their investment needs. As investments are risky, its important to invest with amounts we are prepared to set aside for a long period. Also, its necessary that we know what we are investing in. Some investments could reap high gains when the economic climate is positive, but at times like now are very risky. Its therefore important to understand our investment objectives, our risk appetite and how we would respond in times of volatility when making investment decisions. Also, there are times when we may consider taking opportunities to reap early gains instead of keeping the investment for a long period of time during times of volatility. Of course, we can only take gains when such investment cost is less than the gains we could make as some investment products have high management or surrender fees meant to encourage investors to be long term investors. If we have been monitoring the volatile markets, it may be a good strategy to seize those opportunities to take gains of part of our investments.
Since I have quite a large portion of my savings in Japanese Yen as I am still paying off my home mortgage, I decided to make a few foreign currency deposits whenever the yen is strong instead of earning the almost zero interest from the japanese bank deposits. I would be converting the Japanese yen in stages and not doing them at one lump sum. I monitor the rates regularly and record them down so I would be aware of how much it has risen or dropped against other currencies. This is by no means a way to time markets, but rather as a means to understand the reasons for the ups and downs of a currency by comparing comments of investment or currency analyst. For instance, at every drop of the Australian dollar by a large percentage points, I would have converted my yen and so far I have accumulated quite a big portion of Australian term deposits. As the market is quite volatile, I have made only 2 weeks, 1 month and 3 months terms so I could easily sell the currencies on maturity of those terms. One such opportunity presented itself on November 10 when I made 14,000 yen over a 2 week period on a deposit of 100,000 yen or a yield of 14%. I converted a few of my term deposits but still have quite a few others that I kept to earn interest else, I would realize a loss if I would convert them now. Yet, this strategy is different from a previous one where I kept the deposit for 6 months when the
AUD currency was on a consistent upsurge in beginning 2008. But, I do not think its the right approach not to take quick gains in such volatile markets. It requires more time and concentration to be more vigilant in times of volatility and I think this not only applies to investments. Whenever there are times of volatility and big change, the society rewards those who are constantly on the look out and keep tabs on change. For instance, investors are investing in countries where central banks are more actively changing rates than those who prefer to keep a steady rate. To some extent, we need to be changing with the times as there are times we need to be steady and times we need to evaluate the necessity to make constant changes. And when necessary, take gains when possible. No hard rules - it really depends on our own assessment of volatility and risk tolerance. But definitely, only make such decisions that you can afford making.
(Photos show dau fu fa sold at HKD6.50 (USD0.80), porridge with pork intestines and stomach that are the most smooth I have eaten at HKD24 (USD3) and prawn noodles which are almost similar quality or not as good as those in Malaysia at HKD26(USD3.3)).
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