Real Trades

You might notice a couple of changes today.  I have added a disclaimer page so that I can share my actual trades with you.  The links are on the right.

Preferences
I have always wanted to do so, but didn't know if I should.  When it comes right down to it, though, I don't know a better way of sharing the thought process that I use in deciding what to buy and when to buy.  You are going to notice that, currently, my time horizon is very short.  Also, my current preference is Exchange Traded Funds (ETF's) over stocks (or bonds).  That hasn't always been the case, but I feel it necessary to adjust to market conditions.  I let the market tell me what to do, and market volatility is the deciding factor for me, right now.

Returns
For ETF's, I divide my portfolio into five equal parts.  Sometimes, I will only take half of a position (one tenth of my portfolio), but usually I stick to using one of the five parts.  For the sake of simplicity, I will count the results of each trade as if it were one fifth.  A gain, or loss, of ten percent in one trade, for example, would translate into a two percent change in my overall portfolio (ten percent of twenty percent, or, 0.1 X 0.2 = 0.02).

Position Size
I know some people advocate changing the size of positions in an attempt to manage the amount of risk.  My experience has been that is a recipe for disaster.  For whatever reason, I end up winning the small returns, and losing the big ones.  If I am going to invest, I am going to wait for an opportunity which is worth taking the risk.  When in doubt, I wait for a situation where the doubt is gone.

So, follow along.  Despite my slow start, I remain optimistic, overall.

June Portfolio Update

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I have been enjoying some Albertan hospitality, which also means it is the middle of July and I am only now posting my June results. 

My own returns came from my correctly choosing the inverse Exchange Traded Fund for Natural Gas futures in the middle of June as the price of Natural Gas dropped a little over 12 percent.

The correction in longer term bonds at the end of the month provided a good entry point to what I believe should be a continuation of the summer rally.

In my May update I had mentioned that gold looked promising, but during the month of June it ended up being flat to down.  I am watching for energy stocks to break out of their downwards trend as seasonality tends to favour them around this time.

XIU dropped below it's 200 day moving average at a price which I will call $19.00.  This would trigger a sell in my Basic Timing Model.  Since the 200 day moving average was rising, I would have purchased XIU again as close as I could to that same price after XIU bottomed and approached the moving average from below.

Six month return for TSX @ June 30, 2011 = -0.86 percent
Six month return for Basic Timing Model using XIU = -1.6 percent
Six month return for Advanced Timing Model (my returns) = -3.57 percent
Money for charity = $411.27