THE BATTLE FOR FINANCIAL INDEPENDENCE WITH NOUGHTS ON CONTINUES
It’s been a good week which is great. My running total increased by £1965. Albeit I’ve been caught on the wrong foot and am playing ‘musical chairs’ with myself.
But it’s easy enough to be happy and smiley when its going well and as a bonus I’m almost through Friday the 13th without a major crisis.
So big smiles all round.
Underneath the smiles however, I’ve got a lot of concerns. As a momentum investor a steadily rising market somewhere or other is brilliant, because my mate Sharescope and I working as a team should have spotted it and I should be in it riding the wave and inching closer to financial independence.
A falling market is no problem because I’ll be out the moment my stops are hit. I may well lose a few hundred pound on each holding but a steadily falling market is not the end of the world for me.
The one that is a pain where the sun doesn’t shine and dangerous for me as well, is a volatile sideways market. My system will have me whipsawed in and out.. Death not from a deep stab wound, but from a thousand cuts.
Here’s a good example of whipsawing in action.
This scenario is bad news for me. The red arrows show selling to a stop loss, the green arrows are buying signals. In out. in out, in out and beginning to look like in again. Each trade isn’t a major catastrophe in itself, but cumulatively they hurt.
Its difficult to know how to trade these situations. The excellent Robbie Burns advocates trying something three times and if it doesn’t work, giving up and moving on. Might be an idea to incorporate this into my strategy, we’ll see.
My star performer this week is the Baillie Gifford American Fund, up 2.83%.
After its recent pullback to my eyes it looks in good shape. There is resistance just over 800, my guess is it will power through that and carry on up.
The Neptune Global Technology Fund is in a very similar position, it recently pulled back slightly and is now right up on resistance.
Its up 1.87% on the week and again my guess is it’ll power straight through the resistance at around 202p and take the next leg up.
The AXA Framlingham Global Technology Fund is looking strong, up 1.98%.
As is the Fundsmith Equity Fund up 1.92% and the Neptune Global Alpha Fund up 1.70%
Over the weekend I’m going to do a sweep right across the market to see if there is anything new I should either buy or at least have on my radar. I will be re-buying the Legg Mason IF Japan Equity Fund that I only sold three days ago.
DUH. This is where the playing musical chairs with myself comes in. I had no option but to sell as it gapped down through my stop-loss to protect my rapidly declining profit. But it bounced straight back up and has made.a buying signal.
I think I got lucky to be honest, in that my order was filled at almost the current price of 175p, rather than the sub 160p that it had fallen to. I came out with a profit of £650 and with a bit more luck won’t be too badly stung on the new purchase. Here’s hoping.
I plan to buy my usual opening stake of £5k. When this purchase goes through that will take me to about 70% invested.
Also this week I lost my last two China Funds to a stop-loss. The Fidelity China Consumer Fund went at 286p for a loss of £38.It too has pivoted round and isn’t a million miles away from making another buying signal.
The second one was the Old Mutual China Equity Fund that went at 1562p for a loss of £102.
These two loss’s and the profit from Japan are included in the running total of £1965 profit for the week.
For the coming week, I’m hoping things calm down and that my portfolio performs more or less as the charts indicate it should. But I am worried about the volatility and these violent swings both up and down.
FAGIN’S REPORT FOR THE FIRST QUARTER 2018
THE TRADER’S DIARY
Reflect upon your present blessings – of which every man has many – not on your past misfortunes, of which all men have some. CHARLES DICKENS
Getting a high value financial independence is no easy trick. I’ve had a mixed opening quarter in the second year of the Great British Trade Off competition.