Except for a short stint about two years ago (early 2010), it is more than four years since I have been in the market. Of course, much has changed in that time and dusting off my old untraded accounts was not as easy as I thought it would be. It took longer than I expected to get my trades placed.
Nevertheless, I bought and made some money - not a fortune, but it was nice to be in the black first up. I do not expect to be back in the market for very long but I think some money can be made over the next few weeks. I will then re-assess.
So what has changed?
Certainly the CFD ‘world’. There are now fewer CFD players and, as I have been working overseas for the last 20-months, I am not really familiar with the scene in Australia. I was once a high-volume user (and perhaps will be again) but I will need to re-acquaint myself with this ‘high-octane’ space before I go near it.
Margin Lending has changed too. I use Margin Lending when work load/time zone issues prevent me from being on top of my game, as a highly active CFD trader must be. For example - and without going into detail - I note regulations have changed in relation to trusts and margin loans, which is something else I will need to brush up on.
Another contrast with four years ago is the lack of market depth and volume, compared with the heady days of 2003-2007. People are now more careful with their money. I do expect the heady days to return but it will be a few years yet before we again get hot tips from cabbies.
And the list continues: Many ‘darlings of the bourse’ have fallen from grace. Some have disappeared completely and others are near ‘penny dreadfuls’. The number of ‘tradable’ stocks has fallen and the number of stocks trading at $1 or more is vastly reduced. So in effect, there are fewer stocks to worry about. But I wonder if one can build a really big portfolio in the Australian market these days. The institutions still do it but it is not as exciting as the crazy days. These are more sober times and maybe that is the way it should be.
The other standout is that sectors are at greater variance than I have seen for some time. This is not a wholesale market with all sectors moving together. And because only some sectors are moving, this further reduces the list of ‘tradable’ stocks.
I will look at these sectors in more detail in coming weeks and also cover techniques for joining a market. Like hopping on to a moving bus - some techniques work and some don't. But generally one does not forget well-honed skills.
If you are worried about boarding the moving bus, maybe it is time to get back to basics and re-educate yourself.
Enjoy the ride