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This guide outlines effective investment tactics for the Hong Kong Stock Index (HSI), emphasizing the importance of not losing capital. With an expected annual return ranging from 10% to 50%, the economic cycles influencing the HSI suggest strategic buying at 20,000 and selling at 30,000. Historical performance indicates the potential for significant gains, and investor objectives should align with realistic expectations of recovery times and capital returns. Whether investing short or long term, understanding these tactics can enhance investment success.
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Investment tactics Hung Pui Ki, Majesty 2008078285
Investment Objective • Not to lose • Expected annual return at least 10%, can even as high as 50%
Economic cycle About 3 years About a year About 5 years
Economic cycle vs long term HSI(2010) = 20000 HSI(70s) = 100
Buy at 14000Sell at 22000Annual gain >50% Performance of HSI
Tactics • Not to buy at the lowest (but to sell at low) • Not to sell at the highest (but to sell at high) => Make sure you are to win
Target price • Buy the HSI at 20000 • Sell the HSI at 30000 Questions: • Do you believe that the HSI will finally be back to 30000? • Then, do we stand any chance to lose?
Return • Average time to be back to 30000 = 2 yrs • Max. time taken to be back to 30000 ≈ 5yrs • Average capital gain: Time = 2 yrs, Buy at 20000, Sell at 30000Annual return = 20% • Min. capital gain:Time = 5 yrs, Buy at 20000, Sell at 30000Annual return = 8% • Risk Free return ≈ 2%
Investment Objective • Not to lose • Expected annual return at least 10%, can even as high as 50%