After the bell, the Fed put a damper on the 3-day rally by a surprise hike in its discount rate. The Fed, in its first interest rate move since Dec 2008, raised the emergency lending rate it charges banks from 0.5% to 0.75%.

Despite assurance from the Fed that the move will not raise borrowing costs for consumers and companies, this is likely set fears in investors that the current low interest rate environment is unlikely to last for long.

Who is Enzio von Pfeil?

Enzio von Pfeil has been a commercial economist throughout his working life. Having studied under Friedrich von Hayek in Germany, his PhD was on direct investments. He spent many years as a treasury economist for JP Morgan and Schroders in New York and London, and as a private banker in Istanbul. He became Chief Economist of Smith New Court Far East, which now belongs to Merrill Lynch, and moved to Hong Kong in 1989. Subsequently, S.G. Warburg, Clarion Capital and ABN-AMRO asked him to become their Chief Economist. For some years, Enzio has run his own macro advisory firm, Commercial Economics Asia. Enzio has also created an online version of his proprietary The Economic Clock at Enzio’s Clock. From an Asian perspective, using his seasoned knowledge of global markets, he takes key economic indicators and filters them down to concise, commercially applicable information for investors of all sizes.

Dr. von Pfail has lived off his own bond portfolio for the past seven years, and increasingly is managing his clients’ assets on a managed account basis.

~ taken from Wikipedia~

Today is Triple Witching day!

Triple witching is a day when stock futures, index futures and options expire togther and occurs on the 3rd Friday of each quarter (ie March, June, Sept, Dec). As all 3 products are expiring on the same day, there will be a lot of squaring of positions on this day, therefore, expect high volatility!

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US stock markets close on Monday 25th May for US Memorial Day. Stock index futures close early on monday at 11.30pm.

Memorial Day is observed on the last Monday of May (May 25 in 2009). Formerly known as Decoration Day, it commemorates U.S. men and women who died while in military service. First enacted to honor Union soldiers of the American Civil War (it is celebrated near the day of reunification after the civil war), it was expanded after World War 1 to include American casualties of any war or military action.

I was at the ATIC (Asia Trader & Investor Convention) today. There were about 33 exhibitors promoting their various products and systems. Then I realised, there are so many products available for the investor! You have never invested or traded, I guess you would be overwhelmed at the fair.

Although I am an advocate of futures trading, I shall give a brief summary of what products you can trade to grow your wealth. It is important to choose a product that is liquid and transparent to trade in, therefore I shall not touch on non-regulated products like wine and land investments.

Stocks - the most commonly traded financial product, also known as shares, you are buying a share of the listed company. When you buy a share, you become a part owner of the company and will have voting rights. Other than capital appreciation (which is when the price goes up) you can also gain dividends and bonus issues if the company do well. For shares, you can only buy and need to settle (ie pay up) within 3-5 working days, if you sell your shares within this period, you do not have to put up any cash upfront and only need to settle the difference (known as contra).

Forex - forex are traded in pairs, say, if u buy Eur/Usd, you are effectively buying Eur & selling Usd. Factors like economic conditions, news, data and interest rates differences will affect the movement of currencies. Other than the price fluctuations, investors also have to consider the ’swaps’ which is the difference in interest rates of the 2 currencies, as u are long one & short the other, you will receive or pay the difference on a daily basis. The market is highly liquid and traded 24 hours Monday to Friday.

Futures - futures are instruments derived from an underlying asset, so u can have futures on stock index (HSI, STI, NK etc), commodities (Gold, Oil, Soybeans etc), interest rates (bonds, treasury bills etc) and forex (Eur, Jpy etc). All futures contracts have an expiry date (usually 1-3 mths). Check out other pages of our website for more information.

CFDs - Contract for Difference, this is relatively new in singapore. It is a hybrid of shares and futures, allowing investors to sell short shares and trade on leverage. Depending on the brokering house u trade with, some have expiry dates, while others can allow u to hold on indefinately.

Forex, futures and CFDs are traded on leverage, which u only have to put up a % of the total contract value to trade. Therefore, they are considered to be of higher risk. Pls do find out more before plunging in.

Gold bars

As mentioned in my earlier post, Dr Tan Kee Wee called for a buy in gold during his recent Investment Outlook 2009. Indeed, in this current market conditions, the appeal of gold is glittering once again as a safe haven bet. Market has risen steadily since trading to a low of $681 in Oct last year and is now once again testing the $1000 mark.

The question is: How do investors get invested in gold?

Buy into gold mining shares? Buy physical gold bars or gold coins? Buy gold jewellary? Why not trade the real McCoy - loco london spot gold!

Spot gold prices are transparent and easily available on channel news asia and the internet, and it can be traded electronically 24 hours a day. It is traded in lots of 100 oz, and for each lot, the profit and loss for every 10cts move is US$10. Say from US$992.10 to US$992.20, for every 1 lot, the profit and loss will be US$10 ($0.10 x 100 oz). Spot gold is traded on leverage, and to trade 100 oz, an investor will have to put up a margin of abt Usd 5500. For this Usd 5500, an investor can trade 100 oz of gold which is valued at Usd99,200 based on today’s price of US$992.

Investors can get started simply through opening a futures trading account with any broking firm. Check out our Get Started section on how to start!

Happy Birthday Washington!!

US stock markets closed on Monday 16 Feb 2009 for US presidents Day.

Presidents Day or Washington’s Birthday is a United States federal holiday celebrated on the third Monday of February. As the first federal holiday to honor an American citizen, the holiday was originally celebrated on Washington’s actual birthday, February 22. But on January 1, 1971 the federal holiday was shifted to the third Monday in February by the Uniform Monday Holiday Act.

Chinese New Year

Chinese New Year Holidays next year!

Singapore markets closed 26 & 27 Jan 2009

HongKong Markets closed 26, 27 & 28 Jan 2009

Japan & US markets normal trading hours

Wishing all a Happy & PROSPEROUS year of Ox! Gong Xi Fa Cai! Huat ar!