A Minor Pull Back May Occur
I think stocks may rally another 7 - 10% from current levels before facing another significant correction.
Look at Table 1. I expect a pull back anytime soon of around 3 - 4%, from 22.13 to 21.23. From
there it will move up to 23.75 before we see a correction of between 10 - 25%! The price target
of 23.75 could be reached by September or October 2012.
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| Table 1: MSCI World ETF IQQW |
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| Table 2: Vix Index |
Why do I think there will be a pull back? VIX is at around 13.7 - 14.5. Every time it reaches this
level there will be a pull back. It is a good time to hedge your long equities / leverage equities
portfolio. You can do that by shorting a CFD on "triple long" ETF like the 3x Direxion US Small
Cap Bull ETF (TNA US Equity). This mimics the Russell 2000 small cap index. Therefore if you
short it, you can achieve a leverage of 3x in the opposite direction of the stock markets. Therefore
if you have 1m of long positions in equities, you can hedge it fully by shorting 333k worth
of the TNA US Equity.
level there will be a pull back. It is a good time to hedge your long equities / leverage equities
portfolio. You can do that by shorting a CFD on "triple long" ETF like the 3x Direxion US Small
Cap Bull ETF (TNA US Equity). This mimics the Russell 2000 small cap index. Therefore if you
short it, you can achieve a leverage of 3x in the opposite direction of the stock markets. Therefore
if you have 1m of long positions in equities, you can hedge it fully by shorting 333k worth
of the TNA US Equity.
Another way of doing this is by investing in the Amundi Volatility World, leverage it 2.3x. It
is a less effective hedge than shorting a CFD on TNA because the Volatility Fund traditionally
rises by half the amount that equities fall. For example, in 2008, when most indices fell by
50%, the Amundi Volatility World rose by 25%. Therefore if you have 1m worth of long equities
positions, you need around 858k worth of Amundi Volatility World, leveraged 2.33x to
fully hedge your portfolio.
is a less effective hedge than shorting a CFD on TNA because the Volatility Fund traditionally
rises by half the amount that equities fall. For example, in 2008, when most indices fell by
50%, the Amundi Volatility World rose by 25%. Therefore if you have 1m worth of long equities
positions, you need around 858k worth of Amundi Volatility World, leveraged 2.33x to
fully hedge your portfolio.
Seriously, if you're a longer term investor, you should just hold on to your long positions or just
take the profit off the table.
take the profit off the table.
Singapore is the Richest Economy in the World. Why I am Not Surprised!
Singapore is now number 1 in the world in purchasing power parity (PPP) income! Number 2
is Norway, one of those rare European welfare states that happens to be at the top because
of their wealth from oil. The US is 3rd and Hong Kong 4th. The key reason Singapore
surpassed Hong Kong and the US is the strength of the SGD.
is Norway, one of those rare European welfare states that happens to be at the top because
of their wealth from oil. The US is 3rd and Hong Kong 4th. The key reason Singapore
surpassed Hong Kong and the US is the strength of the SGD.
A flaw in the study is that Singapore is a city state, just like Hong Kong. But Norway and
US are countries, not cities. If we compare Singapore against major cities like New York,
London, Paris etc. Singapore may come up around 10th to 15th. I know for a fact that
we are around 10% lesser paid than Londoners. But this is gross income, before tax. I
believe that net of tax, Singapore should come in around 5th - 10th!
US are countries, not cities. If we compare Singapore against major cities like New York,
London, Paris etc. Singapore may come up around 10th to 15th. I know for a fact that
we are around 10% lesser paid than Londoners. But this is gross income, before tax. I
believe that net of tax, Singapore should come in around 5th - 10th!
Singapore's miraculous economic development came from hard work, heavy investments
in education, investments in infrastructure, low income and corporate taxes and having
minimal social benefits. This goes directly against the grain of the European economic
model which has high personal and corporate taxes, high social welfare, and much less
working hours. The European model is causing the rich to relocate to lower tax regimes
like Singapore, Hong Kong, certain parts of Europe like Monaco. With the wealthy
emigrating, Europe will have fewer entrepreneurs, fewer corporate investments,
fewer employment opportunities. Their economic woes will never end.
in education, investments in infrastructure, low income and corporate taxes and having
minimal social benefits. This goes directly against the grain of the European economic
model which has high personal and corporate taxes, high social welfare, and much less
working hours. The European model is causing the rich to relocate to lower tax regimes
like Singapore, Hong Kong, certain parts of Europe like Monaco. With the wealthy
emigrating, Europe will have fewer entrepreneurs, fewer corporate investments,
fewer employment opportunities. Their economic woes will never end.
Simply put, if you're young, brilliant, ambitious, hardworking, well educated, so definitely
very talented, where would you live and work? In a country that takes away up to 50%
of your gross income or a country that taxes you up to 21%?
very talented, where would you live and work? In a country that takes away up to 50%
of your gross income or a country that taxes you up to 21%?
- Singapore topped the list for GDP per capita in 2010, and is expected to continue leading in 2050,
- according to the Wealth Report 2012 published by Knight Frank and Citi Private Bank.
- (Screengrab of Wealth
Singapore topped the charts for highest GDP per capita in 2010 at close to SGD $70,000 (USD $56,532), according to a study.
In the Wealth Report 2012 published by Knight Frank and Citi Private Bank, Singapore is also expected to continue to be the global leader in 2050.
Trailing closely behind Singapore is Norway at about SGD $63,000 (USD $51,226), then the U.S. at about SGD $56,200 (USD $45,511), followed by Hong Kong at almost SGD $56,000 (USD $45,301).
Gráinne Gilmore, head of UK residential research at Knight Frank LLP who is also the author of the economic and wealth trends article said, "Other countries may have bigger GDP growth 2010 – 2050, but in most cases, they are starting from a much lower base on economic terms. Singapore is a developed economy, and is expected to achieve a rate of growth which enables it to remain one of the wealthiest countries in the world."
"Some of the factors contributing to Singapore’s forecast performance are its ‘human capital’ – a skilled and educated labour force (which is likely to lead to better long-term prospects for a country’s economic growth), the dynamic business environment (with legislation to match), openness to trade, capital mobility and foreign direct investment. Also, it is worth noting that there is a global eastwards shift in economic activity – Singapore is perfectly positioned to take advantage of this," Gilmore added.
In the Wealth Report 2012 published by Knight Frank and Citi Private Bank, Singapore is also expected to continue to be the global leader in 2050.
Trailing closely behind Singapore is Norway at about SGD $63,000 (USD $51,226), then the U.S. at about SGD $56,200 (USD $45,511), followed by Hong Kong at almost SGD $56,000 (USD $45,301).
Gráinne Gilmore, head of UK residential research at Knight Frank LLP who is also the author of the economic and wealth trends article said, "Other countries may have bigger GDP growth 2010 – 2050, but in most cases, they are starting from a much lower base on economic terms. Singapore is a developed economy, and is expected to achieve a rate of growth which enables it to remain one of the wealthiest countries in the world."
"Some of the factors contributing to Singapore’s forecast performance are its ‘human capital’ – a skilled and educated labour force (which is likely to lead to better long-term prospects for a country’s economic growth), the dynamic business environment (with legislation to match), openness to trade, capital mobility and foreign direct investment. Also, it is worth noting that there is a global eastwards shift in economic activity – Singapore is perfectly positioned to take advantage of this," Gilmore added.
