Editorial Contributor
Alpesh Patel Alpesh Patel is the author of 16 investment books, runs his own FSA regulated asset management firm from London, formerly presented his own show on Bloomberg TV for three years and has had over 200 columns published in the Financial Times. He provides free online trading education on www.alpeshpatel.com
Patel on Markets A Good Start To Last?
Just how bullish are the markets? As I write, the inflation-adjusted Dow is up 114% from its crisis lows and is now trading 10.6% off its 1999 record highs. People are feverishly buying stocks again as they hold on to the stock market saying “How goes the Dow in January so goes the whole year”. Based on historic records since 1987, this saying has actually proved correct 75% of the time. However, I’m wondering whether the spectacular January gains of 7% mean that we should be looking to short the Dow as most of the gains have already accumulated? Well, according to my research, in 15 out of the 27 times since 1987 where the Dow registered a positive January, you would make money by continuing to bet on the market closing even higher at the year end. This looks like nothing better than a coin toss trade to me though as it implies no more than a 50% chance. Of course, if you really want to add fizz to your spread bet, let’s not forget that since 2007 the best performing global indices are Thailand (+200%), Indonesia (+140%), Chile (+100%), Malaysia (+95%), Turkey (+80%).
22 | www.financial-spread-betting.com | March 2013
None of these are the BRICS which are lauded so much by financial strategists and commentators as the saviours of the global economy you will note (these being Brazil, Russia, India & China). It’s also difficult to find a tradeable instrument in a spread betting account to allow you to play these indices.
“Of course, if you really want to add fizz to your spread bet, let’s not forget that since 2007 the best performing global indices are Thailand (+200%), Indonesia (+140%), Chile (+100%), Malaysia (+95%), Turkey (+80%).”