QUOTE(cherroy @ Dec 9 2008, 04:17 PM)
Futures can be good if you know what you are doing and hedging purposes. But it can be high risk trade as well. You use around RM5k to trade some contract that worth 20x of your 5K, ie. leveraging. Leveraging is a double-edged sword as seen by recent global financial crisis.
Statistically, long term provide better return most of the time, but if you mindset is to 'maximise' then I can tell you won't be investing for long term.
You need to learn capital preservation as well which is the key to make one successful in investment.
One day gain 7K using 7K, then next day lose 7K again with those high risk trade, then why bother to trade in the first place? You are trying to raise your broker family only. <-- no offence to any broker.
If you can't perserve or intend to preserve your capital then it is very hard to have a net gain over the long term. You net gain come whatever extra or more than your initial capital, get what I mean?
i know wad u mean.
pls comment on my long term and short term example is correct.
short term
if i invest RM1 for 1day, i get back RM1, total gain = RM1. capital +gain = RM2
long term
i invest RM1 for 100days, i get back RM120.
but if i use the long term to become short term investment. example, day 1 i invest RM1, day 2 RM2, day 3 RM3, and so on.
this carry on effect (reinvest gains) will provide a higher gain correct?
so short term is better if i reinvest my gains? or long term is better in both reinvest gains and just one shot long term RM1 for 100days?
or my example of long term investment is wrong, as in the returns are too little?
This post has been edited by illidanleong: Dec 9 2008, 04:31 PM