ALL THINGS BIG AND SMALL 2.0

A BIG PICTURE EXPLANATION OF WHAT AFFECTS THE DIRECTION OF A COUNTRY'S STOCK MARKET. Investors can choose to earn returns through yields (interest payment) from bonds or dividends from stocks. Bonds (which are like loans) pay out a coupon (interest) on their principle. Stocks (not all) pay out dividends. But dividend payouts are not a certainty, and depends on the company's performance. The bond yield of a country is usually measured by the yield on its 10-tear bond. The dividend yield of a country is the dividend yield of its dominant stock market Index e.g. the SP500 or Singapore's STI. One measure of whether a country's stock market is still attractive is the difference (spread) between the dividend yield of its stock market and the yield on its 10 year bonds. Sovereign bonds are risk-free investments (theoretically) and so a choice between bonds and stocks is a choice between no risk and some risk but potentially higher gain. The bigger (on the positive side) th...

The question whether technical analysis [TA] [or 'charting' as referred to by the less initiated] works has been asked many, many times. Countless studies have been done, some of which show that TA does make a significant difference, and some show that TA does not make any difference to investment performance. For more details of such studies, see: http://en.wikipedia.org/wiki/Technical_analysis . I will use this short article just to recollect my personal experience with TA. For more than a decade, I studied TA, and tried to apply it. I studied all manner of TA from classical charting, to Candlesticks, to the hundreds of Indicators from Moving Averages, to RSI, MACD and the more esoteric ones ones that are constantly being invented. I read about Elliot Waves and Gann Charts, and how some even used astrology to analyse the markets. I delved into Neural Networks, Genetic Algorithms and all manner of pattern recognition, classification and forecasting techniques to feed the Pric...