buy low sell high, buy high sell low

19
Buy low sell high or buy high sell higher. MA YUN G1415626 DING YIFAN G1524677 HUANG YIFEI G1427780

Upload: ma-aimi

Post on 14-Apr-2017

168 views

Category:

Business


1 download

TRANSCRIPT

Page 1: buy low sell high, buy high sell low

Buy low sell high or buy high sell higher.

MA YUN G1415626DING YIFAN G1524677

HUANG YIFEI G1427780

Page 2: buy low sell high, buy high sell low

CONTENT

1. INTRODUCTION2. BURSA MALAYSIA MARKET3. BUY LOW SELL HIGH4. BUY HIGH SELL HIGHER 5. CONCLUSION

Page 3: buy low sell high, buy high sell low

1.Introduction

The stock market is an everyday term we use to talk about a place where stocks and bonds are "traded" – meaning bought and sold. For many people, that is the first thing that comes to mind for investing. The goal is to buy the stock, hold it for a time, and then sell the stock for more than you paid for it.

Page 4: buy low sell high, buy high sell low

4

2. Bursa MalaysiaWhat is Bursa Malaysia Berhad (1818) ?Bursa Malaysia is an exchange

holding company approved under Section 15 of the Capital Markets and Services Act 2007. It operates a fully integrated exchange, offering the complete range of exchange-related services including trading, clearing, settlement and depository services.

This includes exchange-related services e.g.:

i) Tradingii) Clearingiii)Settlementiv)Depository Servicesv) Information services

Page 5: buy low sell high, buy high sell low

5

Bursa Malaysia

Bursa Malaysia Securities Berhad

Bursa Malaysia Derivatives Berhad

Labuan International

Financial Exchange

ExchangesClearing,

Settlement & Depository

Bursa Malaysia Securities Clearing

Sdn Bhd

Bursa Malaysia Derivatives

Clearing Berhad

Bursa Malaysia Depository Sdn

Bhd

Islamic Market Business

Bursa Malaysia Islamic Services

Sdn Bhd

Services Provided

Bursa Malaysia Information Sdn

Bhd

Bursa Malaysia Bonds Sdn Bhd

Page 6: buy low sell high, buy high sell low

Global financial crisis

They changed their Investment objectives from…

Capital Appreciati

on

Investors become more

risk averseLoss of confidence and trusts to the markets

Good Governan

ceProfiling Transparen

cy

Capital Preservati

on& Current

IncomeTotal

Return&

Seeking investment opportunities offering…

5

Islamic Markets

By end of 2009, Bursa Malaysia become the world’s largest Sukuk listing destination with USD 17.6 billion of programme value listed through 10 issuers.

Page 7: buy low sell high, buy high sell low

Buy low sell high Time-honored advice on how to make money in financial markets,

referring to buying stock in one or more companies when prices are low, and selling them after prices have increased, in order to generate profit.

“Buy low, sell high” is famous investing adage about taking advantage of the market‘s propensity to overshoot on the downside and upside. Although it is very simple, it is difficult to execute. It is easy to say whether a certain price is low or high in retrospect, but in the moment, it is monumentally difficult. Prices affect the psychology and emotions of market participants.

For this reason, "buy low, sell high" can be challenging to implement consistently. Traders can use tools, such as moving averages and the business cycle.

Page 8: buy low sell high, buy high sell low
Page 9: buy low sell high, buy high sell low

"Buy low and Sell high" is probably the most useless

advice in investing?

Page 10: buy low sell high, buy high sell low

If a stock is going down, what’s to keep it from going down? Do you really want to hang on to a stock through what could amount to months

and months of bad times just to finally feel vindicated months–or perhaps years–later?

When is the time to buy a stock at a low price? You wait until it has stopped going down and started going up. Plain and simple. And you don’t do it right away. You make sure the stock is well on its way up and then you jump on and enjoy the ride.

Page 11: buy low sell high, buy high sell low
Page 12: buy low sell high, buy high sell low
Page 13: buy low sell high, buy high sell low

1. It is not a concept that can be easily and straightforwardly implementedSome inexpensive stocks are actually true value plays and buying them will result in substantial gains.

2. It is misleading in some ways, as lows and highs only become clear in retrospect. Buying cheap stocks is not a risk-free strategy. In fact, your risk of losing money may actually increase over time as the stock loses value or fails to appreciate to your expectations.

3. Traders and investors must have a certain objective method to determine if prices are high or low.Using a moving average of a shorter duration and one with a longer duration can assist in helping traders buy low and sell high as well as protect downside risk.

Page 14: buy low sell high, buy high sell low

In the stock market of Malaysia

An approach to buy high, sell low, more suited for long-term investors is to use the business cycle and sentiment surveys as market timing tools. The market follows a rather consistent pattern of moving from fear to greed over long periods of time. Times of maximum fear are the best time to buy stocks, while greed is the optimal time to sell high.

These extremes take place a couple times every decade and have remarkable similarities. These emotional cycles follow the business cycle. When the economy is in a recession, fear predominates as economic activity decreases. This is the time to buy low.

When the business cycle is in its expansion phase, economic activity is increasing. Typically, people are feeling optimistic about the future. This is the time to sell high. Sentiment surveys such as the Consumer Confidence Survey provide further insight into the business cycle.

Page 15: buy low sell high, buy high sell low

4. Buy high sell higherWhat is Buy High Sell Higher

•Picking the bottom in a stock is very difficult for individual investors. Many investors are

lured into a false sense of security when buying beaten down companies, only to be

disappointed as the stock continues to fall.

Buy high sell higher is the strategy that known as momentum investing, is an

investment strategy that aims to capitalize on the continuance of existing trends in the

market. The momentum investor believes that large increases in the price of a security will

be followed by additional gains and vice versa for declining values. Buy high and it takes

two huge skills to succeed. One is to find highly volatile stocks that are going up fast.

It’s all about betting that price trends will continue. In this sense it is a very speculative,

risky strategy – but history suggests it can work very well indeed.

Page 16: buy low sell high, buy high sell low

How it works

Page 17: buy low sell high, buy high sell low

How to select

Page 18: buy low sell high, buy high sell low

Be aware of…

Momentum strategies also involve a couple of practical problems you must be aware of.

If you buy and sell shares frequently, you will end up shelling out a lot of money in broker commissions and stamp duty. This will eat away at your returns.

The investor uses momentum strategy bears significant risk since the time for investor to react is short.

Page 19: buy low sell high, buy high sell low

Conclusion Some inexpensive stocks are actually true

value plays and buying them will result in substantial gains. However, buying cheap stocks is not a risk-free strategy. In fact, your risk of losing money may actually increase over time as the stock loses value or fails to appreciate to your expectations. Consider buying strength, and get in on relatively expensive stocks. The risks are not as great as they appear and the potential for upside is consistently better than bottom fishing for inexpensive stocks.