CAD, HK Real Estate

click chart for better view

if you look at this chart, there is a very round bottom from mid 2009 which is now over four years. this is telling you the only direction is up ie CAD is down in the next two years hitting at least 1.18.

this event might have part impact on HK real estate as well. when i have more time, i will look into AUD/NZD to see whether the trends agree. if they do, then HK real estate will correct at least as much ie the percentage from 1.05 to 1.18 almost 13 percent or more.

the reason is when USD gets that strong, HKD will too, thus limiting any growth prospect or there might even be a chance of recession, then having an impact on employment thus squeezing the purchasing power to acquire real estate. as then, the landlords themselves could have liquidity problems and become more willing to sell thus depressing prices even more.

DOW and HSI

click on it for a better chart

many readers asked about the fallout i forecasted earlier.

at the time, hsi is about to make a correction because the fourth leg up is rare without a correction. a correction of 800 points does come, so is the fourth leg. still hsi is not out of the woods yet if you look at the weekly chart, it is still on the margin of a possible fallout and has not climbed back into the right v of a w chart formation.

since then, dow is on a trend going south already, so brace yourself for a rough ride ahead esp in sept.

click here below for dow's chart or copy link to your browser:
  http://finance.yahoo.com/q/ta?s=^DJI&t=6m&l=off&z=l&q=b&p=&a=&c=

Fed facing a dilemma

walmart results hit a death knell into dow, dow looks peaked out for now, in line with my earlier forecast on dow.

check here for walmart's chart:
 http://finance.yahoo.com/q/ta?s=WMT&t=6m&l=off&z=l&q=b&p=&a=&c=
you will see the stock is being unloaded over two round tops and sure to go down further.

we all heard of us economy picking up, but walmart is telling us a different story, the general public is not buying at its stores, why?

with food, fuel and utility costs all gone way up in the past few years and still not much rise in pay, the general public has to cut back on its spending, even at walmart.

fed's continued qe has caused food fuel and utility costs gone way up though the housing and stock markets have also zoomed, but the wealth effect has only generated spending from a small part of the population, the larger general public is squeezed in their budget for basic living and have less to spend elsewhere.

the recent labor unrest at McDonald is a good case in point, those are the people who can hardly live a decent life with all basic costs gone up so much.

would fed continue her qe?

if she does, then there will be more labor unrest, housing and stock markets will shoot through the roof, many stocks may suffer from declining revenue because of inadequate or squeezed spending.

if she doesnt, then house prices will reverse its current trend. stock markets will tank or suffer serious corrections denting spending of the even small part of the population who has enjoyed the recent rise in house and stock markets.

let's see how fed can strike a balance without causing too much shocks to the market.

Age 10-45 must read, the earlier the better - FRUGAL LIVING

many readers or their younger ones like to embark on luxurious [well not really luxurious, but not really in line with their income] living.

many of our western counterparts like to go on vacation once a year, imagine a family of four going on serious vacation like two weeks, away from home in another country. the costs of flight, hotel, car rentals, meals, entertainment [like theme park tickets] and souvenirs would amount to one or two months family income after tax. that is an outrageous sum, it adds up over the years and would rob you off in better housing, investment opportunities or lost business opportunities because you have no or less money in your pocket.

another problem is that you borrow to spend.

the many no habits are listed below, not exhaustive but enough to dent your wallet:

• long vacation outside the country once a year or frequent vacations
• new phones, PCs, cameras, TVs, hifi every now and then
• upgrading to the latest fads of your hobby - fishing, sports etc
• movie trips
• frequent dinner meals in chic restaurants
• brand name fashion

 readers who have teenage kids should share this article with them.


here below is an article from CNBC

Living in his car, Cramer developed investment strategy

JIM CRAMER, JIM CRAMER, U.S. DOLLAR, FIDELITY INVESTMENTS, BUSINESS NEWS

CNBC.com | Thursday, 8 Aug 2013 | 6:15 PM ET

(Click for video linked to a searchable transcript of this Mad Money segment!)

Jim Cramer has enjoyed a long, successful career. But it might not have been quite as long or successful he had not embraced this very important idea.
Save. Whatever you can – whenever you can. But always save.

It may sound simple but Cramer thinks too few people really understand the concept.


Quite simply, a good investor always saves – period.

"That's something my father ingrained in me," said Cramer. "On the advice of my father I opened an account at Fidelity with the Magellan fund and would contribute a little every week," said Cramer.

And no matter what twists and turns life presented, Cramer always saved – it was that important.


Sometimes he was able to put away a large chunk of change and other times it was only a few dollars here and there, but nonetheless, Cramer always saved something.

In fact, Cramer realized saving was such an important tenet of success that he continued to save at a time when he could barely afford anything at all.
"That was a terrible six months," Cramer said.

The Mad Money host hit rock bottom early in his career - at the time he was working as a journalist and making next to nothing. After a thief broke into his modest California apartment and stole absolutely everything, Cramer had nothing left and nowhere to go.


Cramer was living out of his car.


"I was living hand to mouth, and people would take me in now and then so I could get a shower, change, get a good night's sleep," he explained.


At that time in his life, it was a struggle for Cramer just to stay afloat; just to stay healthy. Yet all the while – he continued to put away a little money.


Cramer pared off a small percentage from each paycheck and sent that money to Fidelity for deposit in the Magellan Fund.


At that time in his life Cramer couldn't afford much - he had to make choices and set priorities. And though he had to go without many things, the virtues of saving money in a mutual fund and by proxy, owning stocks, was one the few things he just refused to forsake.


"I never quit saving," he said. "How poor was I, yet I still put away money."

Now Cramer understands that sometimes life is unkind and it's not always easy to save. But nonetheless, he advocates squirreling a little money away, no matter what.


The takeaway here, he said, is that you must try to save no matter what, through thick and thin. "If I could still save when I was living in my car, sick as a dog you can put away some money, too."

Gen Y should read

let your next generation read this article and heed such warnings.

Why Generation Y fears the stock market

Commentary: Coming of age amid two crashes, you would too

By J.J. Zhang  who is a chemical engineer and amateur financial adviser who was the winner in MarketWatch’s second annual World’s Next Great Investing Columnist contest. He runs the blog MarketTech Reports. You can follow him on Twitter @MarketTechRpts . 

One of the largest transfers of wealth between generations is starting to occur in the U.S. As baby boomers enter the retirement phase, the next generation of workers, Gen Y or the Millennials (those born in the 1980s and 1990s), are now entering the workforce and beginning their prime earnings

Generation Y fears the stock market, the result of coming of age during several major financial crises. 

According to research group CEB Iconoculture, Gen Y comprises over 76 million people with almost $900 billion in spending power. In contrast the baby boomers, also numbering 76 million, have $2.5 trillion in spending power.

However, for this new generation, it’s a very different world than the one seen by their parents. The baby boomers saw the rise of the U.S. into the world’s only superpower and all the accompanying economic growth and rewards that came with it. 

They reaped the rewards of the chemical revolution, the golden age of manufacturing, the computer revolution, the information age, energy abundance and globalization. They also juiced growth via the use of debt which turned the U.S. into today’s debtor nation. 

In contrast, the future outlook for Gen Y is that of a nearly bankrupt nation, rising global competition from emerging countries, crumbling infrastructure and insolvent retirement and welfare programs, among others ills. For this generation, financial security is a fragile hope due to high educational debts, stagnant upward social mobility and poor employment prospects. 

For Gen Y, it becomes even more important to start retirement planning early as government Social Security guarantees, employment security and wage-growth prospects will not be what their parents experienced. 

Posttraumatic stock syndrome

However, this generation has also suffered through several financially traumatic experiences that have and are continuing to shape its investing views.

Baby boomers saw a relatively stable and strong growth period during the ‘50-’70s which influenced their long-term belief in market returns. In contrast, Gen Y adults experienced two major bubbles and recessions and high volatility, which have led to one lost decade already. 

Indeed, the early vanguard of the Gen Y’ers joined the real world only to experience the dot-com crash. They subsequently started investing in their mid 20s only to find the housing bubble and the subsequent great recession. The first impression is the most important and so far it doesn’t look promising. 

This lack of tangible gains, roller-coaster volatility and recent scandals such as the bank bailouts, mortgage shenanigans, Ponzi schemes and scandals like Goldman’s designed-to-fail securities, have all made them cynical and distrusting of the stock market and investing in general. 

This isn’t hypothetical. In a recent MFS Survey, 40% of Gen Y agreed with the statement “I will never feel comfortable investing in the stock market.” Among Gen Y investors, 54% feel overwhelmed by available choices and 47% tended to put off investment decisions. 

Due to fear of risk, 30% said their primary investing objective is protecting principal and have allocated an average of 30% to cash, more than other age groups, and nearly equal to the 33% allocated to stocks. T. Rowe Price noted in 2010 that almost one in five self-directed participants age 25-35 had over 80% of plan assets in cash. 

While protecting principal is no doubt important, excessive risk aversion does not lend well to long-term investing: after all, no pain, no gain. With 54% of Gen Y concerned about when they would be able to retire and 44% lowering their retirement expectations, they need to put aside their fears and tiptoe back into the markets. 

What can Gen y’ers do?

Though these psychological traumas have already influenced Gen Y actions, luckily time and youth is on their side. With the first wave still in their early 30s, there’s still plenty of time to start and let compound investing work for them.

The important first step is learning to let go of their fear of the market, or at least reduce it to a healthy level. Yes, the stock market can be a scary place sometimes but there are precious few ways to generate returns significantly above inflation that is necessary for a Social Security-less future. 

Notably, high volatility and risk averseness has caused Gen Y to make more use of financial advisers and other experts. Especially for those concerned about market volatility and risk, seeking a financial adviser to help them tiptoe into investing is a good idea. 

However, it’s particularly important that one find a good and trustworthy adviser — those with fiduciary duty is a must. While advisers do charge fees that can undermine returns, in this case it’s still a net positive over the high cash many Gen Y’ers are holding. 

And keep in mind; advisers are not a lifetime commitment. There’s nothing wrong with learning from them and then striking out for yourself. 

One trait of Millennials is their considerable sophistication in finding information and learning for themselves. The widespread availability of financial products and services such as ETFs, online discount brokerages, instant financial info like real time quotes and new tools such as computer-aided rebalancing have given then all the help needed to create a well-rounded and diversified portfolio ready for the long term. 

It may be we’ll look back from the future and call this the Generation DIY.

DOW and recent HSI performance

click for a better view

dow's weekly chart shows a declining RSI amid new highs achieved, this kind of inconsistency will not last very long.

HSI recently reached short term highs on a three leg hikes from 19400 [read earlier updates for chart].  usually this also will not last, since four leg hikes are rare, without first seeing a correction.

given both seems to be topping out soon, long positions should be taken with caution or at least not with serious money.