Whenever there is a new stimulus affecting the market, stock trading usually excites market sentiments.
Policymaking in stimulating stock prices comes in many forms such as increasing money supply, interest rate cut, buy-up in government bonds, and many more.
Of course, other micro-factors in lifting a stock price can easily be evaluated when there is a healthy merger and acquisition with another firm. Before you decide to participate in stock market, it is necessary to identify yourself clearly of the trading objective. Basically, a market player can be a speculator for short-term trading while stretching up to 15 market days.
An investor creating a long-term portfolio might hold them for six months onwards.
To summarise in simple words, speculation is pegged to the quick rise of stock prices from fundamental or technical momentum while investment stakes heavily depend on value investing and dividends earnings such as REIT instruments.
In this short article, I shall outline the margin of observations for those who may be keen to speculate for fast money.
To begin with, take a daily peek at macro fundamental and micro views in a particular stock as this is necessary for initiating an entry. To strengthen your stock trading skills keep a daily observation of US and European bond yields every morning.
Simply looking at Dow Jones benchmarks and European indices may not be sufficient to decide if the Asian stock market for the current day will be bullish.
However, the decline in US T-bond yields is an effective tool to predict higher stock prices in the Asian markets.
Read the micro-news from Exchange websites to check if any company announces positive news such as acquisition, financial statement growth, dividends payout, and others.
This will effectively give you a better choice of stock selection when it climbs into the daily Top 40 volume list as well.
DAR Wong is an approved Fund Manager in Singapore with 25 years of trading experiences in global financial markets. The expressions are solely his own. He can be reached at [email protected]