In this equities down market, there are many experts and analysts calling for buy on the equities claiming that valuation is cheap. But if you had followed their buy recommendations, you will be catching a falling knife.
One way of determine valuation is Price Earning Ratio, which is Share price (P) / Earning per share (E). Share price is down drastically, so this ratio looks cheap. But question is does E falls as well. If P is down and E is also down, then forward Price earning ratio may not look as cheap as people think.
I do not know the whole picture of the subprime issue and I do not know how great the damage it will cause to the worldwide economy. During this period of time I just concentrate on my currencies and commodites trading. The most important fact is that I am making some money.
In the early part of 2008, I had opened account at ForexYard platform to trade currencies, oil, gold and silver. I had deposited US$5,000 and today my account is worth US$10,843.30. So my profit is up 116%.
This platform does not charge commission on its products, it makes money from the spreads. Other than gold, the spreads of other products are very reasonable.
I am not a greedy person, as long as my profit for this week is more than my profit for last week I will be happy.
Last week my account as at 5th July was worth US$10,076.72 (see here), this week my account as at 12th July was worth US$10,843.30, so there is some improvement.
See below for my account details:
Investment News Update: How do I make money in this kind of market?
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