Currency and Bonds driving the markets

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As such, I’ve been as quiet as a church mouse when it comes to buying.

© Image copyright epsos
Everyone is a great investor in a bull market and it has been tough to be a genius in the last few months for sure.

Stocks I have bought have halved and then doubled in a frustrating pattern, but all in all I’m scraping about 10% since May. However this includes a big successful, but risky, punt on Lloyds and doesn’t include the vast majority of my cash sat dead on the side-lines.

Whilst the market has bounced the stocks I held, before I bailed out, have not. They are about where they stood when I got out, which suggests they are in a group best typified by the small cap market. As this isn’t the case, it would appear that my old portfolio was in fact simply a portfolio of stocks uncorrelated to the market swings linked to hedging currency and bonds.

I say this because without doubt currency and bond markets are driving all the other markets, with the EUR/USD the key currency pair against which markets are being dragged and torn. This is of course not surprising, but it does highlight the perils of equity investing in turbulent times.

Friday was a funny day and yesterday a good one. I had been watching Robert Wiseman Dairies for many any months and I had it in the portfolio I dumped before the summer crash. I was waiting for it to tick up before re-entering. It did on Monday morning, 7%, so I bought it and a clip of Tesco which had collapsed the day before.

By lunch it was up 35% and a possible takeover was muted. I sold yesterday on confirmation of an agreed deal. There is nothing as sweet as pure luck. Yet without ADVFN and the ability to surf it on my iPad at Heathrow, I would have missed it.

Of course, Tesco will prove too early but old habits die hard. If it falls a lot more I will buy a third clip if it falls even further. These days I’m just putting a toe in the water when buying and sometimes it doesn’t work in my favour and sometimes it does.

However I think the water is warming up.

I predict a good 2012. How’s that for a brave prediction!

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