Long Term Investments

We have not blogging for more than a month. It's not that we are losing interest in the market, it's just that we are way too busy with our personal life!

Managing a portfolio is not an easy task, we had come all the way and we are still learning. At this juncture, we might be slowing down a bit in the futures and stock market, as we are busy with the new home and office renovation; plus, our newborn just arrived not long ago.

To us, these are achievements! A new house and a newborn in the same year. They are also our long term investments!

Monash IVF

Our trailing sell stop triggered and we finally sold Monash IVF which is listed in the Australian Stock Market after holding more than a year. Since we were busy with the home office renovation, it is not a bad idea to set up trailing stop to protect our profit. We could have made more than what we pocketed today; but who knows where is the highest high. We could have made lesser if we sold our holdings earlier. Anyway, we are glad with the profit.

Australia cash rate is about 1.7 percent given by the banks, especially the big four after the recent interest rate cut last month. Including dividend and the capital appreciation, we have bring home about 34 percent from selling Monash IVF. It is not a bad deal in the current low interest rate and volatile environment!

Since we've got some capital, it is time to hunt for other potential stocks in the OZ market...

What the charts tell us

A quick scan at the daily charts and we've found for DJIA, its nearest support is at 18200. If this level able to sustain, market will slowly test 2016 high, which is 18622. On the other hand, break below 18200 will test next support at 18000. A big correction might comes if Dow broke below 18000, far support-17600.

As for Nikkei 225, the market was range trading between 15500-17000 since Feb till today. Where is the market heading? Will the 28 Trillion stimulus able to move the market higher? Far support we are looking is at 14000. Upside resistance 18000, next 22000. These are the trading range we think Nikkei 225 gonna move for the rest of the year.

We haven't seen any recovery yet for Shanghai Composite Index since the big drop from May 2015. The market had been moving between 2700-3100 from beginning of the year to date. Nearest support for SHCOMP is seen at 2900, next 2800. Resistance 3100. If Shanghai market able to break above 3100, next target 3300-3400. Will China becomes the favourite market for investors and fund managers?

Hang Seng Index rebounded aggressively since the Brexit day close to 19500 from end of June, till today's closing at 21739. Immediate support is found at 21500. If further correction happened, next support we are seeing is at 20500. Near resistance 22500.

KLCI Index and the currency Ringgit considered as the worse performing market in South East Asia region due to 1MDB incident. Market was trading between 1600-1730 for the past seven months. We think KLCI Index will test support at 1640 in near term. Further down, support is 1620. On the upside, resistance is 1670. 

DJIA broke record high

Overnight Dow Jones gained 10.14 points closed at 18516.55, off record high from 18557.

Hang Seng Index July futures closed at 21731 on Friday evening (+145) while cash market ended at 21659.25 (+98.19). Range of the week for HSI futures was traded between 20835-21773 (938). HSI was ranging between 19500-21500 since March; looking at the chart, the nearest resistance is seen at 21857. If market able to break above this level, next target is 22000. Higher resistances-22568, 22813. On the downside, immediate support is at 21663, further down 21157.

As for KLCI Index futures, July contract gained 11.50 points ended at 1668.0; cash market gained 13.62 points finished at 1668.40 on Friday closing. Range of the week for spot futures was traded between 1649.0-1671.0 (22.0). Immediate resistance for KLCI Index is found at 1680, next 1695. Support 1658.0.

What should we do with the rate cut?

Interest rate cut translates into less interest offered by the bank if you are a fix deposit saver in Malaysia. The standard fix deposit rate in Malaysia bank's is 3 percent per annum. Banks offer a higher rate if the capital you deposit is higher, or the tenure you save is longer! With the rate cut news released yesterday, we believe the latest fix deposit rate will be reduced by banks very soon. 

We think it is time to allocate some funds into the sharemarket. Our top picks would be Bursa Malaysia- the Stock Exchange of Malaysia which offer high dividend; property companies such as LBS Group, SP Setia and Sunway Group, Reach Energy and Real Estate Investment Trust such as YTL REIT, IGB REIT and Pavilion REIT. 

Of course, if you have the ability to borrow from the financial institution and have the ability to pay the mortgage, we think this is an opportunity to hunt for affordable properties. We bought a property few months ago, looking to transform into J&M home and office.

Malaysia cut interest rate to 3%

Bank Negara Malaysia (BNM) decided to cut Overnight Policy Rate (OPR) to 3 percent after the meeting today. This is the first time interest rate cut after 7 years from Global Financial Crisis. Is Malaysia moving into a low or zero interest rate trend soon? Perhaps it is time to hunt for affordable properties or quality stocks in Malaysia market! 

When the news was released, July KLCI futures was trading at 1660.0 (+2.0); range of the day was traded between 1654.0-1662.5 (8.5) while cash market was at 1658.31 (+4.34). As for Ringgit, 1USD is equivalent to RM3.98. 

Brexit Day!

Brexit Day! The voting started at 1400 KL/HK time zone yesterday and we'll get the result at 1400 later this afternoon. Whether Britain will leave the European Union or not, the market is definitely a volatile one! No matter is stock and futures market or the currency market. So, buckle your seatbelt and stay safe! 

Hong Kong market had up for five consecutive days. At yesterday's closing, the futures market gained 152 points closing at 20895 while cash market closed at 20868.34, up 73.22 points or 0.35 percent. However, today is an extremely volatile day. Range of the day for June futures contract was traded between 20190-20999 (809). Immediate resistance for HSI is seen at 21157, next 21700. Supports- 20540, 20160. 

As for Malaysia market, KLCI Index futures ended at 1643 while cash market finished at 1639.98 at yesterday's closing. Range of the futures for morning session is traded between 1623-1638 (15). Support for KLCI is seen at 1605; resistance- 1650. 

Shanghai Disneyland

The Shanghai Disneyland is officially open today, after years of construction.

At today's trading hours in Hong Kong market, Shanghai Jinjiang Hotel International Group (HK:2006) which is the subsidiary of Chinese Government owned Shanghai Sendi Group is trading between $2.84-$2.91. How will the share price perform in the future? We'll see.

As for Hang Seng Index futures, market is trading below 20000 for June contract; after touched highest at 21157 on the 8th of June. So far, the trading range for HSI is between 19900-21157 (1257) in the first half of the month. 

Resistance is found at 21150; next 21350. On the downside, we think market is testing 19448. Further down, 18850 is far support. At the time of writing, HSI June futures contract is trading at 19942 (-327); while cash market is trading at 20108.05 (-359.47). 

Important people in our life

Apart from your family and your loved one, there are a few important people in your life could help you succeed in your life and financially.

These VIP are known as accountants, brokers which include property or equity brokers, bankers, solicitors, insurance agents and tax advisors.

If you could not find a good accountant, it is better for you to be the one. After all, it is best to know your own financial situation rather than leave it to accountants! Plus, it save your money if your don't hire one.

If you are running your own business or you are holding a high position in corporate life, you certainly need a good broker to get the best deal for you, in order for your investment to grow. Unless you are the one who do your own research and you are the one who make the deal. Again, it save you broker fees!

Sometimes you need a banker to advise you what is the latest trend in the banking industry. Interest rate changes, latest deposit rate or borrowing rate etc. A banker can help to make your money work harder.

It is a good idea to have a trusted solicitor to help you in advising all the legal matters. Not that advising on how to run away from tax man; but at least to help in speeding up the legal process in your business or buying and selling investment properties. 

Whether are you rich or not, we think it is a good to have an insurance agent in providing services and advices on protecting your life and your assets. From advising what is the appropriate insurance package to have in different stages of life and helping in making claims whenever we need it. We definitely need this person's help!

And finally, everyone wish to have more money in their account rather than donating them to the government- the tax department! If you have a tax advisor, he might be able to help you to save some money so you have extra allowances for holiday!

These are the people we think are important in helping us succeed in our life financially. However, the most important person still "us" who make the decision and execution!

What's happening in June?

May month is not that bad after all. Although there was a sell down at the beginning of the month, market started to rebound in the middle of the month. So, what's next in June?

Today the active futures contract for Hang Seng Index futures is June month and it was traded between 20294-20719 (425). Closing at 20474 (+157), it was 341 points discount compared to the cash market which closed at 20815.09 (+185.70).

For Hang Seng Index futures, we see next resistance at 20650. Next target 21000-21100. Downside supports are 20380, next 20100.

In Malaysia, today is the expiry for KLCI May futures contract. Market might consolidate between 1620-1640 in near future. Upside resistance, 1660; next 1680. Support 1608.

Simple steps to become a millionaire

We've read articles about how to become a millionaire. We have real life examples of millionaire friends and relatives advices of not only work hard and work smart; effectively manage our finance is also crucial to maintain a millionaire lifestyle. Below are a few tips for sharing:

1. Set a weekly or monthly spending budget

Is that necessary to set a spending budget? You will be surprised to find out a healthy spending budget will save you on unnecessary spending. In long run, the saving could turn into a budget for your car or even a house. 

2. Track and record daily expenses

Sounds like a complicated job? It is always hard to begin with. But once you've started recording daily expenses neatly and continue with discipline, you can easily summarise them into a monthly expenses and from here you know where your money is spent.

3. Pay yourself first

Whenever the wage is out and paid into your bank account, always remember to set a portion of savings aside before you start using the rest of the money.

4. Saving for a purpose

If saving without a purpose, it is easy to use up the money once you see the numbers in the bank account. Saving for a purpose, such as for a new house, for higher education or to invest etc. Saving for a purpose will remind us not to use up the fund easily, unless for emergency.

5. Insurance for protection

If you think paying for an insurance is unnecessary, please think again. Although paying for insurance is like an expenses, the money is flowing out from your bank account. But then, when you need to make a claim from the insurance company, you would be grateful for having them.

6. Set up an emergency fund

Sometimes bad things happen in life. Losing a job, need a big expenses for medical treatment etc. It is wise to have at least 6 months spending expenses as an emergency fund for backup, just in case you are unable to work for a few weeks or months.

7. Funds allocation

Once saving and emergency fund is build up, allocate the extra fund you have for investment purpose. Buying a property, invest in share market or other potential business etc.

8. Start invest and grow the assets

It is never too early to start invest and grow your assets. It takes patience, time and effort to invest and let the assets appreciate in value. Your first investment might not make money; or you might fall into investment trap. Therefore it is advised to invest as early as possible. Learn from mistakes and accumulate the experience.

9. Wealth management

When your net worth reaches a certain amount; or your cash and assets had reached a certain level, it is time to manage your wealth. Learn how to protect your assets, manage your finance and cash flow as well as continue to grow the assets. 

10. Increase cash and asset, reduce debt

When your earning power is great, it is also translate into a higher spending power. Effectively using the high earning power to increase your cash flow and assets; try your best to reduce bad debt is the way to make your money grow more.

11. Spend within your means

It is not easy to spend frugally especially you know how rich you are. It requires discipline to spend within your means and live a down to earth lifestyle.

12. Retirement planning

Just like saving and investing, retirement planning is never too early to think ahead. While planning for your expected retirement lifestyles, it is always a good idea to plan it financially too.

13. Financial education

There is no way to execute Step 1-Step 12 without proper financial education. Read up on financial magazines and personal finance books; attending seminars and talking to people you know etc. These are the ways to increase your financial knowledge. Never give up if you fail and keep learning from the lessons and investment mistakes.

14. Charity

It is a blessings if you able to help the needy financially. If not financially, donation in terms of material or spend time and effort for charity work.

15. Don't forget to have fun

There is no point to have loads of money in your account but feeling empty or unhappy in your life. What is the point of working so hard to make so much money? Don't forget to have fun, enjoy life and spend the money when necessary. At the end of the day, there is no point having loads of money leaving for your loves one, but you are the one who don't use them.

Conclusion: Sounds boring? If these are the steps and actions can guarantee a financial free and stress free lifestyle, no harm in trying. No matter what is your occupation and how big is your earning power, we believe live frugally, spend wisely, invest smartly and manage our finance efficiently are keys to maintain a healthy and wealthy millionaire lifestyle. And also, enjoy your life and have fun.

What is your net worth?

What is your net worth? According to Google's definition, net worth is defined as assets minus liabilities. For an individual, it represents the properties owned, less any debt the person has. For a company, net worth is the value of the company.

Is that a good news if an individual has no debt? From the accounting point of view, of course! It means you have assets or cash and without debt, this shows the net worth is positive.

But to a Bank's point of view, an individual with positive net worth is risky to deal business with. The bank is less likely to borrow money to an individual without loan repayment history and therefore it is not easy for the individual to borrow money for business expansion or purchase property.

If you were given a choice, do you want to be the individual who is free of debt or full of bank debt? 

How low is market going?

All Asia Pacific market ended in red on Friday closing! Nikkei was the worst performing market finished down 1.41 percent. Followed by Malaysia down 1.26 percent then Hong Kong market, lost 0.99 percent.

Range of the week for Hang Seng Index spot futures was traded between 19448-20253 (805). The futures lost 199 points settled at 19604; cash market lost 196.17 points finished at 19719.29 on Friday afternoon.

KLCI Index spot futures was traded between 1610.50-1652.50 (42.00) during last trading week. Cash market lost 20.72 points finished at 1628.26 while May futures contract finished down 22.50 points at 1621.00.

Dow Jones dropped 185.18 closed at 17535.32 on Friday. We expect Asia market to open lower on Monday morning. For HSI, we see the support at 19000; and for KLCI, supports are 1600, next 1580. On the upside, short covering might push HSI to 19950 or higher to 20300. For KLCI, resistance is seen at 1640.

35 things to do before the age of 35

We were cleaning our home office few days ago and we found a note written '35 things to do before the age of 35'. A note written few years back when we just started J&M Investments Portfolio.

Becoming a millionaire, owned multiple passive income, travel the world, run a charity fund, having our own kids etc. These could be the lists everyone is dreaming...the list goes on and on. Of course, we couldn't thought of 35 things to do. In fact, we only have 19 items on the lists and we had achieved quite a lot these few years before our deadline- the age of 35 which is in 12 months! 

Looking back, it is not how ambitious we were writing these goals. Setting reasonable and achievable goals within certain time frame let us foresee our futures; on and off looking at and reviewing what we wrote push us go further along the journey we wanted to travel. At the end of the day, it is not the goals that make us proud, it is the journey we went through that shaped us who we are today.

When the deadline reached, it will be a time for us to reset our new goals, new future and begin a new journey. No matter this is a journey towards a life goals, career goals or financial goals, we are trying our best to enjoy the journey, welcome all the obstacles and celebrate all the happiness and winnings.

Have you set your goals? If not, it is not too late to start now.

Sell in May!

The market was declining since first trading day of May. The effect of Sell in May...

In Hong Kong, Hang Seng Index May futures ended at 20049 (+74) at today's closing; cash market gained 46.94, closed at 20156.81. Range of the week for Hang Seng Index futures last week was recorded between 19887- 20987 (1100). The market broke the support of 20000. Where is market heading from here? 

Market is oversold. It is not surprise to see a rebound in HSI...But after that, is the sell down continue ? Or it is time to slowly collect shares? We see the resistance at 20250, next at 20500 and higher at 20800. On the downside, supports are 19800, next 19400.

In Malaysia, KLCI May futures was traded between 1629.0-1667.0 (38.0) last week. At today's closing, futures closed at 1629.50, lost 11.50 points while cash market ended at 1632.19 (-17.17). Immediate support is found at 1625, next support is 1600. On the upside, market will retest 1648. Higher resistance 1665.

Currently, we are hedging in the futures market. Sell when market rebound and buy on dips. We are monitoring the share market and will slowly collect at the right time. Our portfolio still consists of dividend stocks, REITS, foreign currencies, cash and properties. We will reallocate the percentage of holding according to the market condition.

Sell off on first trading day of the month

Despite Wall Street posted a gain of 117.52 points last night, the Asia market ended with a mixed result. Especially for the market who enjoyed a long weekend, first day of the month actually begin with a terrible sell off.

The worst performer is Nikkei who lost 518.67 or 3.11 percent at today's closing. Hang Seng Index broke 21000; settled at 20676.94, lost 390.11 points or 1.85 percent. FBM KLCI Index broke our predicted support; finished down 21.28 points at 1651.44.

The May futures contract for Hang Seng Index ended at 20545 (-309). Range of the day was traded between 20502-20984 (482). Immediate support for HSI is 20450. Next crucial support is 20000. As for KLCI spot futures, market ended at 1642.00, lost 20.50 points, about 1.27 percent. Near support is seen at 1640.0, further support is 1600.

Dow Jones falls 180 points at the moment. Will we see a further drop or recovery by tomorrow morning? Looks like another volatile selling is happening...

KLCI went further south...

FBM KLCI Index went further south today. Can we blame the news of bond default? The news shaken investors confidence, created an opportunity for market sell off. Cash market lost 17.58 points or 1.04 percent at the end of the day, April futures lost 23 points settled at 1670.50 while May futures contract ended at 1662.50 (-24.00).

In Hong Kong, futures market was a volatile trading session as today is the expiry of the April futures contract. Spot futures settled at 21470 (+180) while May futures contract finished at 21118 (-7). Range of the day for May contract was traded between 21122-21567 (445). The cash market gained 26.43 points finished at 21388.03.

Looks like Hang Seng Index is supported well above 21000 for the time being. But next month? Will we see higher high? Or lower low?

FBM KLCI Index is oversold within these few days. Will we see a rebound soon? 

FBM KLCI Index closed below 1700

We mentioned yesterday that FBM KLCI Index need a breakup or breakdown to break the boring trading range. Finally, we saw a breakthrough this afternoon thanks to 1MDB scandal - the default of $1.75 billion bond!

The spot futures open at 1712.0 in the morning, highest touched 1713. Futures contracts rollover activity plus the default news pressed the market all the way to 1702 in the morning session.  The support at 1700 couldn't hold on anymore. We saw market lowest went to 1690.0 before futures settled at 1691.0, lost 22 points. Cash market closed at 1692.50 (-22.01).

Immediate resistance for KLCI is seen at 1698. Higher resistance at 1706. On the downside, near support 1675, next 1650. Ringgit was weaker, last seen 1USD~ RM3.91.

Sell in May go away?

Market was range trading for the past one week. For Hang Seng Index, it manage to hold above 21000. The trading range for Hang Seng Index futures last week was traded between 21021-21664 (643). No matter how market falls, HSI is trading above daily MA10-21260, a sign of market is moving on a buying signal. The futures settled at 21291, lost 190 points at today's closing. For cash market, finished at 21304.44 (-162.60).

This week is the final week of the month. The futures market will start the contracts rollover activities and the long weekend is coming. How will the market moves? Will we see a higher high next week next month? Bear in mind, next month is May. The market is always spooked by the saying of "Sell in May and go away". Plus, Hong Kong market had been up since Chinese New Year, does it mean another correction coming?

Anyway, we sold Emperor Capital (HK:717) after a 10 percent profit within a month. We will look at it again if Sell in May comes. If not, we still have other stocks in hand for dividend collection in the second half of the year.

If 21500 had become resistance, 21000 is an important support for HSI. Further supports are seen at 20800, next 20450. On the upside, if market broke above recent high 21664, market will moves towards 21800, next target 22000. 

In Malaysia, FBM KLCI was ranging between 1700-1725 for the past one month. At today's closing, cash market closed at 1714.51, lost 3.45 points. The spot futures finished at 1713 (-6.50). KLCI Index need a breakthrough. The market need to break above 1730 to see a new trend. If not, breaking below 1700 will see supports at 1675, next 1650.

All Asian markets ended in green

After overnight Dow Jones closed up 164.84 @ 17721.25, today all Asian market ended in positive territory. Hong Kong market is the best performing market, surged 3.19 percent, Nikkei closed up 2.84 percent and Shanghai ended up 1.44 percent.

Hong Kong April futures market opened gap up 239 points in the morning. Lowest traded at 20691, market went highest reaching 21223 at the end of the trading day and finally settled at 21216, surged 746 points or 3.64 percent. Cash market finished at 21158.71, up 654.27.

In Malaysia, KLCI Index futures was traded between 1716.5-1724.5 (8.0). Futures closed up 7.5 points at 1721. Cash market gained 8.11 points settled at 1723.11.

Will market moves higher? Technically, Hang Seng Index broke crucial resistance- daily MA100-20557 and 21000. There is a chance market will move higher; with on and off profit taking comes in. Immediate resistance for HSI is at 21300, next 21500. On the downside, supports are 21080, next 20850.

KLCI Index still ranging between 1700-1725. This market need to break above 1730 to see a higher trading zone. 

Resistance ahead

It was a choppy week again for the market. The range of the week for Hang Seng Index spot futures was traded between 19967-20835 (868); while for KLCI Index futures, trading range was between 1704.5-1723.0 (18.5).

For those who are holding stocks, there might be no big difference in price fluctuation, unless the speculation stocks you are holding moved dramatically. For those who are in index trading, it is a good opportunity to make money provided you stand on the right side; if not stay away from volatility if you couldn't take it. It could be a bored session in the market if the stocks you are holding is not moving yet. But, be patience.

We see Hong Kong market might consolidate between 20000-21000; and for KL market, index will range between 1700-1730 in short term. The market need catalysts to break the upside resistance or downside support...

Ringgit is strengthened against USD again as we can see 1USD~RM3.88 today. We will monitor the currency market closely.

Since we just bought a property last week, we'll be spending more time in our new portfolio compare to the current market. However, we are trying to be multitasking so we wouldn't miss out any making money opportunity.

Is correction coming soon?

With overnight US Dow Jones closed up 107.66 @ 17792.75; we expect to see market open higher on Monday.

We see immediate resistance for KLCI Index at 1725. Next target-1750. Market might try to test the psychological support at 1700, further down 1675 is the next support.

There is no trading for Hong Kong and China market on Monday. Depending on how other Asian markets perform on Monday and how US behave on Monday closing, we see resistance for Hang Seng Index at 20900. If market can break above this level, we might see 21000 to 21300. On the downside, supports at 20300 and 20100. If market unable to hold above 20000, we might afraid short term will see 19800 or lower.

No matter how the market moves, we hope we will exercise our risk management strategy and never be afraid to buy during bargain hunting.

Market choppy, but slowly up

Though there was less update from us about the market lately, it doesn't mean we are on holiday again. We were spending some time in property hunting.

The market was choppy in the entire March month, but it was slowly inching up. The range for March Hang Seng Index Futures was traded between 18993-20891 (1898). The active futures contract is now April, with the day range between 20453-20835 (382), closed at 20499, lost 278 points on Friday evening due to profit taking before long weekend. Cash market settled at 20498.92, lost 277.78 or 1.34 percent. In Malaysia, cash market closed at 1710.55, down 7.03 points on last Friday. April futures contract lost 8 points, finished at 1704.50. 

We've added Emperor Capital (HK:717), one of the leading broker house in Hong Kong into our portfolio, and also Cash Finance Ser GP (HK:510). We are looking forward to add in a few holdings when market retraced and glad to hear about dividend payout from a few companies we are currently holding.

Market slowly moving up...

Looks like market is holding well above 1700 for KLCI Index and for Hang Seng Index, holding well above 20300. Is the bull getting tired? If you are holding shares which has paper profit, will you take profit now or wait a little longer? Maybe market might move differently after the Brussels Attack this afternoon. 

Hang Seng Index spot futures lost 68 points finished at 20607; cash market ended at 20666.75 (-17.40) at today's closing. FBM KLCI Index gained 6.39 points settled at 1724.75 while March futures ended up 4.50 points at 1724.00 on Tuesday evening. 

We see immediate resistance for KLCI Index at 1725. Next target 1750. Any correction will send market close to 1700. For HSI, immediate resistance is seen at 20850. If market can break above this level, there is a chance market will retest 21000. On the downside, supports at 20300, further at 19800.

On a separate note, USD is soften. We managed to see 1USD~RM3.99 today. While there are so many analysts out there predict whether is now the beginning of bull market or continuation of bear market, we think it is ok to stay invest in stock market and occasionally hedge against the futures market. Meanwhile, we had set aside some capital for property market too, although it is not cheap to get one now. If not now, then when?

Bull market? Or bear trap?

The market continued its gain this week. Hang Seng Index March futures gained 232 points closed at 20237 on Friday evening; cash market settled at 20199.60, up 215.18 or 1.08 percent.

Although tight range, it has been a volatile week, a fight between the bull and bear. The range of the week for spot futures was traded between 19813-20298 (485).

With overnight Dow Jones finished up 218.18 settled at 17213.31; market will open higher on Monday.  Resistance for HSI is seen at 20863, next is Daily SMA100-21017. Higher target 21500. Will market go that far next week? Or the end of rebound? We'll see. On the downside, 20300 had become the immediate support, next 19820; further down 19300.

In Malaysia, the market finally broke above 1700. FBM KLCI Index gained 5.63 points finished at 1696.54 on Friday evening; March futures ended up 6.00 points at 1697.50. Resistance for KLCI futures is seen at 1725, next 1775. Downside support is 1690, next 1675.

Is negative interest rate a new trend?

The European Central Bank (ECB) had just announced cutting its main refinancing rate to 0.0 percent, cut deposit rate to minus 0.4 percent and extended its monthly asset purchase to $80 billion euros, effective from April. Dow Jones was up 100 points in the early trade, taking this as a positive news to cheer market.

But honestly, is the negative interest rate a positive news to the market? Is it now a new trend for the central banks to practice negative rates? What are the effects to the consumers and economy?

Negative interest rates is now practised in five countries- The ECB, Japan, Denmark, Sweden and Switzerland. Negative interest rates means the central bank will charge negative interest, meaning the money depositors deposit doesn't grow; in fact depositors need to pay regularly to keep money in the bank.

The purpose of practise negative interest rate is to stimulate economy, to encourage people and business to spend money instead of saving money. But hey, in long term, does it really help the economy? Will depositors cash out from banks and put the money under the pillow? Will it cause another banking crisis? 

Let's see what the experts say.

http://www.investopedia.com/terms/n/negative-interest-rate-policy-nirp.asp

http://www.cnbc.com/2016/03/10/negative-interest-rates-positive-side-commentary.html

http://www.cnbc.com/2016/03/07/negative-interest-rates-a-dangerous-weapon-commentary.html

http://money.cnn.com/2016/03/07/news/economy/negative-rates-central-banks-bis-report/

Market up since March

The Asia market ended higher this week, with Hang Seng Index closed up four consecutive days since the first day of March.

This week, the trading range for Hang Seng Index March futures contract was range between 18960-20184 (1224), closed at 20100 (+239), successfully hold above daily MA10 and MA20. Cash market ended at 20176.70, gain 234.94 points or 1.18 percent.

With overnight Dow Jones closed up 62.87 @ 17006.77, we expect the uptrend to be continued, possible with profit taking or small correction. The immediate resistance is expected at 20260, next 20600. Downside support 19950, 19770, further support-19200. 

In KL, March futures contract traded between 1646.0-1699.0 (53.0) since beginning of March. Spot futures gain 9 points, finished at 1695.90 on Friday evening; cash market settled at 1692.49 (+4.29). Upside resistance is seen at 1725 for KLCI futures. If this level is broken, a new uptrend will be formed. On the downside, supports is seen at 1690, next 1670.

We added a few stocks into our holdings. In Australia, a digital media company named Netccentric which was listed in ASX since last June; in Hong Kong, Tracker fund of Hong Kong (HK:2800) and Shun Tak Holdings (HK:242).

Rally begin?

Following US Dow Jones surged 348.58 at closing on Super Tuesday, Asia market all closed in positive territory, with Nikkei and Shanghai market closed more than 4 percent. 

Hang Seng Index futures opened at 19645, 321 points gap up above yesterday's closing price. The market was so excited it continued climbing to highest at 19995 in the afternoon before it settled at 19890 (+566). Cash market was traded to highest 20058.12, finished at 20003.49, gained 596.03 points or 3.07 percent, with a turnover of 92.68 billion. Hang Seng Index broke all the resistance we expected; currently we see immediate resistance at 20000, next 20260; supports-19750, next 19400. 

FBM KLCI Index surged 20.21 points closed at 1691.03. The March futures contract gained 16.50 points, finished at 1687.50. Today's range for spot month futures was trading between 1679.00-1689.50 (10.50). Resistance for KLCI futures-1700, next 1720.

How did market perform on Leap Day?

Overnight Dow Jones closed down 57.32 at 16639.97. Apart from Singapore and Australia market finished in green, New Zealand market closed unchanged and the rest ended in red. Shanghai Composite Index closed down 2.87 percent is the worst performing market among the region after the announcement of Reserve Requirement Ratio cut by PBOC. 

In Hong Kong, Hang Seng Index futures for March contract opened at 19345; market traded to lowest 18960 before it settled at 19057 (-293) at closing while cash market finished at 19111.93 (-252.22). The trading range for March futures contract was between 18960-19345 (385).

February is a short trading month. The entire trading range for February futures was between 18217-19715 (1498). We believe market will retest daily MA10-19204. Higher resistance 19560, 19800. On the downside, immediate support is 18800, next at 18200.

In Malaysia, FBM KLCI Index lost 8.69 points ended at 1654.75. The February futures contract settled at 1654.50 (-10.50) while March futures contract finished at 1647.50 (-14.50). Next month futures contract was traded between 1645.00-1661.00 (16.00). Nearest support for KLCI is 1630, next 1600. Resistance- 1675, 1700.

Johnny Walker & Sons XR 21

During our three weeks holiday, we had quite a lot of good and quality wines. Of course not to forget to add an extra item to our collections- Johnny Walker & Sons XR 21. Cheers!

How many accounts do you have?

We couldn't remember the title and the author of the book we read a decade ago that inspired us to start our investment portfolio. All we do remember is the various accounts the author asked us to set up.

1. Everyday account 
This is the account that involves everyday transactions where the income is deposited into and the money is out to pay bills and expenses.

2. Savings account
No matter you are a fresh graduate just landed a job or an adult that is in workforce for quite some time, it is important to have the habits of saving a small proportion of your income. The best way is to have a separate saving account from everyday account so you can track how much money you have accumulated. 

3. Rainy day account

Also known as emergency account. No one foresees what will happen to us. We might get retrenched one day or we might be sick or involved in accidents. Rainy day account is there for us to survive during disaster days. 

4. Investment account
If we afford to have savings and rainy day accounts, why not increase our capital to set up an investment account. The purpose of investment account is to generate more income. It could be used to buy stocks or properties; start a business if you have a good business idea or business partner. 

5. Education account
Even you are loaded with cash but without proper knowledge and financial management, the rate of spending could be faster than the rate of making money. Therefore, it is advised to have an education account; spend money on buying reading materials or attending seminars, the result could change our life.

6. Charity account
We don't need to be Bill Gates or Warren Buffett to have a charity account. Even as an ordinary person, we can afford to do charity. Donation in terms of money or materials to the needy; spend time and effort in charity works. This is to remind ourselves to be grateful of our life. 

It's amazing how this article actually changed our life. Not only we have the above accounts, we have more than that! All we need to do is put in some effort and take it easy, step by step.

What's next in the market?

The slowing economy in China, negative interest rate in Japan and some European Countries, multiyear low oil price, strengthened US dollar and emerging countries currency crisis, plummeting stock price and the fear of property bubbles etc...

How are these issues driven the economy and market? What are the assets shall we as an investors look into? Is it better to invest in stable dividend payout REITs (Real Estate Investment Trusts) or possible greater return sharemarket at this juncture? Shall we remain our portfolio as it is or make changes to stay defensive or aggressive?

Each individual has different personality, risk profile and risk appetite. It is a good idea to sit down and think about our financial circumstances, create a goal, work out a financial plan and act according to the plan. We'll be surprised to see how the action we take today affect our future life...

We love the saying of "You are here today because of the decision you made in the past. Your future will depends on the decision and action you made today." 

Range trading

Looking at the chart and with Dow Jones one day closed up the next day closed down, we think Dow Jones will trade between 15800-16500 in short term. Unless market break above 16600, we'll see a new uptrend formed. 

February is the shortest trading month for Asia market. The trading range for Hang Seng Index futures for this month is traded between 18217-19715 (1498). There is another two days till spot month futures contract expiry, we think market will hover around Daily MA10 at 19027. 

Traditionally, market will rally from March till April or end of May due to corporate earnings announcement. Will this trend continue this year? According to Financial Secretary John Tsang, Hong Kong is facing slower growth and is in a challenging economic situation. 

We see HSI will range bound between 18530-19500 in near term. If there is any good news in the market, short covering and fresh buyers may push market above 19600, the next resistance is seen at 20000, then 21000. Conversely, if short sellers and panic cut loss send market towards 18200, further support is seen at 16000.

As for KLCI, market is expected to range between 1625-1675 until new catalyst form a new uptrend or downtrend. Key support and key resistance are 1600 and 1700, respectively.

The end of holiday

We were away for three weeks during CNY break. Not much time and effort spent in the market; indeed it was a very good break to refresh our mind and soul.

The good thing about our job is, we can work wherever we go so long there is internet connection. We can invest in whatever we think it is worth to buy so long it is worth the value.

We relaxed for the past few weeks, drank a lot of good and value wines; review the journey J&M had come along and we are ready to share a few stories of successful financial management in the future.

We will work hard in the year of monkey, spend frugally and invest wisely. This is the motto of J&M towards a successful financial journey.

The bear is in control...

Happy Chinese New Year to those who are celebrating the festive season! We are away from the trading desk, therefore there will be no update from us about the market.

We didn't really pay attention to the market as we are taking a CNY break. All we knew is Hang Seng Index plunged 1000 points when market resumed trading yesterday. Nikkei 225 broke 52 weeks low again, lost almost 2000 points within this trading week. Looks like the bear is in control of the market. 

We'll come back to the market when we are ready. Happy holiday to those who are still in holiday mood; happy trading and happy investing to those who are in the market!

Regional market in positive territory

On the last trading day of January, Asia Pacific markets ended in positive territory, though it is still far from the beginning of the month.

Nikkei 225 soared 2.80 percent or 476.85 points closed at 17518.30 after BOJ announcement of adopting negative interest rate. Following Nikkei, Hang Seng Index surged 487.28 points (+2.54%) ended at 19683.11 at closing. February futures contract up 450 points, closed at 19723. Range of the day for February futures contract was between 19031-19738 (707).

Thanks to the revised Budget 2016, FBM KLCI Index managed to break above resistance 1650. Cash market finished at 1667.80, soared 33.27 points or 2.04 percent. January futures contract settled at 1656.50 (+22.00) while February futures ended at 1660.00 (+33.50). Next month futures was traded between 1627.00-1661.50 (34.50). 

Will the rally continue next month? Maybe. Since Chinese New Year is approaching in a week, there could be a mini CNY rally. However, transaction could be lower for Asia market ahead of the festive season.

We see the nearest resistant for Hang Seng Index at 19880, next 20250. On the downside, immediate support is at 19480, next 19050. For KLCI, immediate resistant at 1680, higher 1700; supports--1645 and next 1620. 

Negative Interest Rate for BOJ

Imagine you are living in a country where the interest rate is negative, what does that mean? It means the money you have sitting in the bank doesn't give you interest! Your money isn't growing!

Today the Bank of Japan announced adopting a negative interest rate for the country. We believe it is a move to stimulate the economy. It is a supplementary increase in Japan's qualitative and quantitative easing programme (QQE). Sounds like the QE2 The States used to have.

Nikkei 225 experienced a roller coaster ride during the trading hours. Finally, the cash market surged 476.85 or 2.80 percent, closed at 17518.30. As for Japanese Yen, we see some weaknesses. ¥100 is equivalent to RM3.40; ¥100~ USD $0.82 or 1USD ~¥120.

Maybe this is the time to visit Japan; time to collect some quality Japanese liquor...

Revised Budget 2016

The Prime Minister announced a Revised Budget 2016, as the Budget was prepared when crude oil was at USD$48 last year, but now crude oil is trading at USD$33.

The announcement could be a catalyst to push up FBM KLCI Index. At closing, the cash market gained 2.99 closed at 1634.53; January futures finished at 1634.50 (+5.00). Range of the day for futures market was trading between 1623.00-1641.00 (18.00). We see near resistant at 1650 and higher at 1680. Support 1600.

There is surprises in our Ringgit movement. Ringgit is strengthened against major currencies after the announcement--against greenback, we see 1USD ~ RM4.17! Against Aussie dollar and Singapore dollar, it broke below RM3.00; and with pound, 1£ is less than RM6.00! We think our RM is undervalue, we are not expecting to see Ringgit strengthened overnight, but over time...perhaps to 1USD ~RM3.80?

Is Hong Kong Losing Its Luster for Global Investors?

Since our portfolio consists of Hong Kong dollars, Hong Kong equities and hedging through the futures markets, this is an interesting article to share from Bloomberg-- Is Hong Kong Losing Its Luster for Global Investors? 

As Hang Seng Index had fallen 34 percent from the peak, is now the right time to buy and hold? Or the market still have room to drop? Where shall we heading from here? Hopefully this article will give us some hints...

Market rally!

The market rallied for two days, on last Friday and yesterday. However, the gains couldn't sustained and Asia Pacific markets closed in red again, especially Nikkei 225, lost 2.35 percent and Shanghai Composite Index slumped 6.38 percent!

Hang Seng Index futures rebounded to highest 19505 on Monday afternoon. However, as overnight US closed down 208, this caused the Asia market sank again today.

Hang Seng Index closed at 18860.80, lost 479.34 or 2.48 percent. Spot futures closed down 337 at 18901. Since it is final week of the month, it's the time of futures contract rollover again. We think market will hovering around 19000 in short term. Upside resistant 19300, 19700. On the downside, supports are 18530 and 18200.

FBM KLCI Index gained 1.45 ended at 1626.66 at closing. January futures finished at 1629.50 (+1.50). If the market broke above 1630, we see next resistants for KLCI at 1650, higher 1680. Supports are 1600 and 1580. Market could be volatile this week as January futures contract is expiring on this coming Friday.

5 reasons Malaysians' life is more difficult in 2016

The year of 2016 could be a challenging year for stock market investors, as the global market started in a panic sell-off from the first trading day of the year. For Malaysians, it could also be a tough year as the following factors are affecting the daily life of most Malaysians.

1. Rising cost of living

This is not a new thing! Since the GST implementation started in April 2015, all Malaysians are facing this issue. More expensive food from local supermarket and dining out; transportation, daily use products, clothing, medical bills and medicine. Even with the oil price tumbled to US$30; there is no reduction in our petrol price.

2. Depreciated Ringgit

Normally when oil price drop, Malaysians should entitled a cheaper petrol price. However, with US$1 equivalent to RM4.30, we are still paying expensive petrol. The Ringgit is depreciated not only against USD, but against major currencies too. As a result, imported goods are more expensive and travelling abroad, we are paying extra overseas expenses as our Ringgit is very weak. Unless you are an exporter, you will benefit from the weak Ringgit. The glove manufacturers are the biggest winner!

3. Difficulty in applying loan

Not only China is facing a slower economy; in Malaysia, we can feel the declining stock market and economy is moving in a slower pace after GST implementation last year. Banks are tightening the loan approval especially for the housing loan.

4. Stock market crash

Unless you do not invest or speculate in the local stock market. The sell-off since last year is causing most Malaysians financially stranded and mentally drain.

5. Stagnant property market

Malaysia's property price appreciated dramatically since 2008, effects of cheap money flooding around the world. During the past few years, transactions increased no matter is brand new or sub-sale properties. Till now, buyers think it is too pricey to buy and looking for negotiation whereas sellers unwilling to let go at a cheaper price. Plus the tightening bank loan approval, this had become an unhealthy phenomenon and is affecting young couples especially those who just started a family.

The above might not affect all Malaysians, but if it does; we hope there is a solution for every problems. Sit down and figure out the priorities, workout a financial plan and act according to the plan.

Is the selling stop?

The market continue in a depressing mood, with a lower low.

Hang Seng Index slumped 344.15 ended at 18542.15, marked a lower low compared to yesterday. The futures market closed at 18751 (-96), reached highest at 19260 in the morning, but long liquidation sent spot futures to lowest at 18530.

Nikkei 225 lost 2.43 percent or 398.93 closed at 16017.26; Shanghai Composite Index ended at 2880.88 (-95.89) or 3.22 percent and FBM KLCI Index settled at 1600.92 (-17.91).

Currently, DJIA is down 18.60, last reading at 15748.14. How will the US market close by end of the day? How does it affect the Asian market tomorrow? Since the global market is in negative zone for 2 weeks, when is the selling discontinue? Will we see a rebound tomorrow or next trading week?

The Bear is here...

The selling pressure in Asia market continue today after experienced a technical rebound yesterday.

At yesterday's trading session, Hang Seng Index futures rebounded to 19647, the highest of the week before broke below the psychological level 19000 this morning.

Technically speaking, the Hong Kong and Japan market is now in bear market. A bear market is defined as a price declined of 20 percent or more over at least 2 months of period or from the peak of the price.

Looking at Nikkei 225, today's closing at 16416.19, a decline of 21.65 percent from the peak since last August. Shanghai Composite Index ended at 2976.52, 42.50 percent slump from June 2015.

Today, the Hang Seng Index futures opened gap down 341 points at 19280. Market dived very quickly in the morning breaking below 19000, marked the low for more than 3.5 years. The index futures ranged between 18762-19343 (581) for the day. At the end of the closing, futures ended at 18847 (-774), cash market finished at 18886.30 (-749.51), down 3.8 percent. The closing for Hang Seng Index is a drop of 33.9 percent from last year's peak.

The market is on heavy diarrhea. There is no prescriptions from any politicians or any policy yet. During the stockmarket crash in 2008, we have Quantitative Easing to stop the diarrhea. But this time, what would that be? While there is no prescriptions available yet, we think the best solution is eat healthy and stay hydrated. Which means, while there is risk and opportunities in the wild swing market, take the calculated risk, manage the risk and always protect the profit and capital.

The Bear Is Here?

Once again, Dow Jones dropped 390.97 on Friday closing, ended below 16000 @ 15988.08. The selling will continue on Monday...

Hang Seng Index closed lower at 19520.77 (-296.64); futures ended at 19468 (-342) on Friday. Be prepare to see a lower index for HSI, key support at 19000. However, market is oversold. Any rebound likely will reach 19800 or higher 20200.

FBM KLCI Index finished at 1628.55, down 4.89; spot futures closed at 1615.00 (-15.00). Next support --1580.

Dow plunged 365 points again

We have to get used to the words like tumbles, plunges, slumps etc. These are the words appearing on financial news very often lately.

Again, the overnight Dow Jones closed down sharply. DJIA ended at 16151.41, falls 364.81, equivalent to 2.21 percent.

There is no escape for the Asia Pacific markets. The market was in deep red sea in the morning, except Shanghai market closed in positive, the rest of the Asia Pacific market closed in red. 

In Hong Kong, Hang Seng Index broke year low again. The cash market closed down at 19817.41 (-117.47) at the end the day while January futures contract ended at 19810 (-249); losses narrowed after short covering during second half of the trading session. Range of the day for January futures contract was ranged between 19468-19893 (425).

In Malaysia, FBM KLCI Index dropped 9.10, ended at 1633.44 for cash market and futures, closed down 15 points at 1630.00. Futures market traded between 1624.50-1636.00 (11.50).

It is a tough start for the year and we think there is going to be a wealth shuffle in the year of 2016. There is a risk in certain business closure and retrenchment. Having said that, whatever goes up will come down, whatever comes down will go up. We wouldn't be surprised to see a new trend or market rise up.

With the way market falls, we are not far away from the bear market. But who knows where is the trough. While it is hard to predict where is the dip and when it is over, we think it's best to hold cash and spend wisely. When we see the big title of "bear is here" in the headlines, or people around you are not interested in the stock market, that is the hint we should start buying.

HSI plunged 565 closed @ 19888.50

The Asia Pacific markets went southbound again, closing in red with Nikkei closed down 0.40 percent and Shanghai Composite Index ended 5.29 percent lower.

Hang Seng Index broke below 20000, a level not seen since June 2013. The cash market closed at 19888.50 (-565.21), down 2.76 percent. Jan Futures ended 456 points lower, closed at 19943. Today the range for spot month futures contract was traded between 19820-20066 (246).

From the technical point of view, HSI is not looking good. Any bad news will trigger market moves towards the lowest level in 2013, which is 19395. Next support 17857. On the upside, resistance is seen at 20835.

Is this a good time to buy stocks? Depends. It depends on your holding power--financially and mentally. If you have a pile of extra cash which you don't need it, yes you can start collecting quality stocks. Bear in mind, the market sentiments and investors confidence is low at the moment, you'll need time and patience to go through the rough time.

If the portfolio you are holding is full of high dividend and quality stocks, you might experience a wild ride in short term, but long term, we think is fine. If the portfolio is full of speculation stocks, we are afraid you might need to restructure your portfolio at this moment. This is what we think. 

No one knows how low the market will go and how long it will last before we see good days. No matter you are a buyer or short seller, market is full of excitement. Bucket your seat belt and happy trading!

Market closed mixed for the week

The Asia Pacific market closed mixed on Friday after days of sell-off. Apart from Japan, the Australian and New Zealand market ended negative, the rest of Asia market closed in positive territory. But, is this positive gain in Asia market a short one?

Dow Jones finished at 16346.45 on Friday, lost 167.65 points. Since DJIA ended in red, we think the market will open lower again on Monday morning.

Hang Seng Index closed +120.37 @ 20453.71 while January futures contract closed up 51 @ 20399. The entire range for the week for spot futures ranged between 20255-21850 (1595). We think 20000 is the crucial psychological support for HSI. Is the market going to break below 20000 tomorrow? 

In Malaysia, FBM KLCI was traded between 1637.50-1697.50 (60) last trading week. The cash market finished at 1657.61 (+2.48); spot futures closed +7 @ 1654.50. We see 1625 as the next support for KLCI, upside resistant 1680.

The Sell off continues...

On the last trading day of year 2015, Hang Seng Index closed at 21914.40. At today's closing, HSI closed at 20333.34 (-647.47). Hong Kong market lost 1581.06 points since first trading day of the year, a shock after China stock market being suspended twice within four trading days. For FBM KLCI, it closed at 1692.51 last year and today, finished at 1655.13 (-12.84); lost 37.38 points within a week.

It is not a good start for the year; but hey, keep calm and start hunting for bargain stocks. It is not a good week if you've invested in stocks since beginning of the year. But for trading, the wild swing presents opportunities to make money. Watch your risk, cut losses quickly if you're on the wrong side of the trade; don't be greedy and be prepare to take profit if you see paper profit in your trade. We are sure with these two rules in mind, this is a week full of trading and money making opportunities.

At this stage, it is hard to pick stocks as the global market sentiments is pessimistic and full of negative news. We think holding index related ETF ( Exchange Traded Funds) is more appropriate at this moment. The rebound in index will moves index ETF, but not all individual stocks will follow.

We think can keep an eye on Index related ETF such as HK2800-Tracker Fund of Hong Kong which tracks Hang Seng Index; HK3084- Value Japan ETF Fund that follows Japanese market, HK2822 or HK2823- if you think it is still alright to bet on China's upside and lastly in Malaysia, MY:0820EA and MY:0823EA, ETF that tracks Malaysia and Hong Kong's benchmark index.

Hello and Welcome to 2016!

Today is the first trading day of the year of 2016. Welcome to 2016 and we hope it is a good start of the year.

On last Thursday, DJIA closed at 17425.03, lost 178.84 on the last trading day of the year of 2015. Because of this, we expect Asian market to open lower on Monday morning. After that, how will market behaves on first trading day of the year? Open low and end up in positive territory by end of the day? Or open low and close lower at final trading hours? Are retail and institutional investors ready to back to stock market after the festive season?

We believe there will be a Chinese New Year rally in the next few weeks. Chinese New Year also known as Lunar New Year is a big celebration in China, Hong Kong, Macau, Taiwan, as well as Chinese Ethnic in Malaysia, Singapore and the rest of the world. However, only the mentioned countries and a few are entitled for public holiday.

This year's Chinese New Year- the year of Monkey falls on the 8th of February (Monday), which is just a month away. If there is a CNY rally, we think it's going to be a short and quick one. Profit taking will comes in before CNY as investors close off position to cash in profit.

Looking at Hang Seng Index, the monthly SMA-21782 is a crucial support/resistant. This meaning if market falls below 21782, further support we see is 20984. If market managed to hold firm above this level- 21782, it will try to test upside resistant at 22222.

As for KLCI Index, the first support we see for the coming trading week is at 1675, further 1650 and 1625. Resistant-1700 and 1725.