Tuesday, November 4, 2014

Portfolio Sale - KT4 DXT China ETF

This is to outline the rationale behind a portfolio sale.

I had invested in DBXT CSI 300 ETF.

The ETF is traded as KT4 on SGX.

The one year chart at the time of entry was down-right ugly.

The spark for the trade was an article indicating that nobody in their right mind would invest in China as the country was going to go bust.

I know, sounds silly now, but that was the consensus opinion in June 2014.

In addition, for a while I have been meaning to move investments into ETF to make it start to run on auto-pilot and rebalance once in a while.

The investment thesis was that China will outperform other markets.

The trigger for the sale was to re-balance out of a performing asset into an under-performing ETF i.e. Europe ETF.

Take a look at the chart from June 18 till yesterday, which is when I exited the KT4 trade.

The return was around 18% on capital, after taking into account trading costs.

All in all a pleasant outcome.

This is not to say that all future trades will do as well.

What it does prove is that if you are brave (or foolish), you will (may) reap your reward (suffer).

Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures

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