Latest Posts


« »

Monday, November 24, 2014

Chinese stock exchanges open their doors to the world = huge opportunities!

Invest in China!
Basically there are two exchanges in China where stocks can be traded: Shanghai on the east coast and Shenzhen in the south. Then there's also an exchange in Hong Kong, but though it's in Chinese hands since 1997, there are different rules than China's main land exchanges.

There are various types of stocks available. For instance, A-shares are only available to Chinese traders and are traded with the Renminbi currency. Since 2002, these stocks are also available to a very limited number of foreign and institutional investors. Aside from that there are B-shares, intended for foreign investors. These are quoted in US dollars in Shanghai, and in Hong Kong dollars in Shenzhen. Then there are H-shares. These are the listed Chinese companies in Hong Kong. For the enthusiasts among us: N-shares are Chinese stocks listed in New York and L-shares are the ones in London.

Anyway, since November 17, China has opened its doors to foreign investors. Thanks to the Shanghai-Hong Kong stock exchange connection, the stock market of the Chinese mainland is within reach of non-Chinese for the first time ever! Investors can trade in Shanghai 560's listed stocks, with a maximum trading volume of 2 billion US dollars per day. It's seen as a first step of the liberalization of the Chinese market. According to Goldman Sachs, Chinese equities will soon become a staple.

Opportunity?


Tuesday, November 4, 2014

Unity is strength: will BRICS set the example?

This group of countries has received increasing attention since the term 'BRIC' was introduced in 2001. Brazil, Russia, India and China distinguished themselves at the time from other emerging markets by their large, rapidly growing economies and young middle class. In subsequent years, the BRIC countries grew very fast indeed. But what are the prospects a decade later?

Tuesday, October 7, 2014

Use a stock trading game to master Wall Street!

Have you ever dreamed about becoming the new King (or Queen) of Wall Street, even though you may only have a very limited trading experience? Fortunately, there's a tool in town that can mimic the real stock market very closely, allowing you to develop new insights and strategies that top investors use to win the market. A stock trading game is like learning to fly without the risks of actually doing it. It can be one of the most powerful ways to learn about stock trading, without having to put thousands of dollars or any of your own money for that matter at risk.

Thursday, October 2, 2014

What you probably didn't know about ETFs...

The strength of an Exchange Traded Fund lies its simplicity, right?. By simply following the index you'll know one thing for sure: you'll never beat it. But that also means that many actively managed mutual funds don't beat them either and actually are not worth investing in, but as the saying goes: if you can't beat them, join them.


The first ETF was introduced on January 22, 1993. State Street launched the SPDR S&P 500 ETF. The portfolio consisted simply of the 500 companies of the S&P 500 index and was calculated the same way as the Index itself, and is a physical replication of the underlying index (which is called 'full replication' in trader's lingo). Simple, transparent, and cheap too!, because the ETF calculates a rate of only 0.0945% as a result of an ongoing price war in the ETF markets. You'd pay ten times the amount if you would trade an equity fund (about 1%).

A lot has changed in the world of ETFs since then. Total assets under management in ETFs has increased to $2600 billion, spread over about 4,000 ETFs. Especially in the United States there has been a strong growth. In Europe, the ETF train is starting to get going as well.

But what is it that you probably don't know about ETFs and SHOULD? 

Sunday, September 28, 2014

My hate/love relationship with Twitter...

Sure, I (often) brag about trades that went great, but sometimes there is that moment when you find out that you were entirely wrong about a company and its stock. To be honest, also that needs to be addressed I think. Twitter is one of those trades that went horribly wrong for instance. Back in November of last year, when Twitter launched its IPO, I couldn't be more skeptical. In fact, if you read the post I wrote you'd think Twitter would be out of business by now. Boy was I wrong. I should've bought it instead of going short, but luckily I had my stop-loss so my financial losses weren't that great, but still... I could've doubled my investment!


It turned out that Twitter is indeed worth its stock price. I switched to the other side and am now very bullish, although it wasn't that long ago when I was still very bearish about this company. At the end of July (as you can see on the chart above) Twitter's stock price surged and that was my conformation that it wasn't all just a hype, this stock is truly a gem. Sure I've been wrong before of course, but what was is that made me think Twitter's stock  would tank?

Risk

Any IPO carries some sort of risk. Although that's the case with a stock has been trading for some time, an IPO has that extra risk attached to it. This is mainly due to the fact that you don't know how the market will react to the newcomer. In Twitter's case, it wasn't making any money. The future prospects weren't all that rosy either with, to me, a vague businessplan and noone seemed to use Twitter as intensively as Facebook or G+ for instance. I even uttered numerous times 'how many users are actually human and not duplicate robot (automated) systems with a Twitter profile?'

Popularity

It turned out there were much more people interested in Twitter than I initially thought. It's true. Every (important/famous) person seems to have a Twitter profile. You can even follow TV shows or sporting events on Twitter with a Smart-TV that has that integrated feature... major! I should've seen that Twitter is much more prominent. That's where I went wrong. 

Lesson learned: do not short populair IPO's but rather wait a few weeks or months to see if the company can uphold its stock price.

Am I a buyer?

Interested, but not at this price. I think I can get a way better deal after a pullback but I definately want Twitter in my long term portfolio!

By: +John van der Munnik 

Tuesday, July 8, 2014

BACK TO BASICS: Are you a trader?

Welcome to the first episode of 'Back to Basics' on VDM Trading. Hopefully it's going to be one of your valuable sources to become a better trader. This information is mainly for people who want to learn to trade the financial markets themselves ('DIY' traders), without the assistance of an adviser, so they retain complete control over their portfolio, and hopefully make profitable trades consistently.

Answer my first question, and let's see if it's worth your time.

Monday, July 7, 2014

Lower unemployment, higher interest rates?

For the past couple of months, one of the main topics of conversation in the financial press is currently under which conditions the buyback program in the United States should be rolled back, and when the Fed will/should raise interest rates again. The most important aspect regarding this issue has been unemployment.

In the meantime, the official unemployment rate in the United States has decreased to 6.1 percent, according to the BLS (Bureau of Labor Statistics). For the fifth consecutive month about 288,000 jobs were created, the best progression since 2000! However, there's still the issue of low wages. One of the reasons why the Dow closed above a historic 17,000 points is that companies are raking in profits due to fact that there are low wages, and they're collecting profits from (still growing) emerging markets. Of course they're also still taking advantage of next-to-zero interest rates.

Disclaimer:

All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.