Saturday, 22 June 2013

Country Stock Market Performance

FRIDAY, JUNE 21, 2013 AT 01:32PM
Below is an updated look at the year-to-date performance of 77 country stock markets around the world. After the pullback we've seen over the past few weeks, the average country is now up just 3.55% in 2013. A total of 49 countries remain in the green for the year, while 28 are in the red. As shown, Dubai and Abu Dhabi lead the way with gains of 45.49% and 38.07%, respectively.

Japan is still up the most of the G7 countries at 27.27%, but keep in mind that this doesn't take into account the fall in the Yen. In dollar terms, Japan is up 13%. The US is up the second most of the G7 countries with a gain of 11%, and then there is a big drop-off. The UK is up the 3rd most at 3.7%, followed by Germany (+2.32%) and France (0.47%). Canada and Italy are now down on the year.

Obviously some of the emerging markets have been getting crushed lately, especially the BRICs. As shown, Russia is now down 18%, while Brazil is down 22%. Let's see if they finally get a bounce next week.

13 Things I Learned About Humans and the Financial Markets

01. Predictions do not work as tomorrow is uncertain. We will only boast about things we have predicted right and talk nothing about the other half we got wrong.

02. Skills can bring us moderate success. However, luck is needed to be a big success. (credit to Jon)

03. We tend to credit our successes to good skills and blame our failures on poor luck.

04. Some of us rely on luck (most unknowingly) by investing for high returns (and losses). A few of us will make big money but most of us will end up much poorer.

05. Some of us deliberately limit the luck factor by choosing investment products with capital guarantee and guaranteed returns. None of us will make big money but none of us will be very much poorer.

06. We need to know how much we can afford to lose (financially and emotionally) before deciding to be No. 4 or No. 5, or somewhere in between.

07. We have many biases. The degree of success in investing or trading depends on how much we can keep our biases in check. No, we cannot remove our biases totally.

08. Confirmation bias – we see what we want to see. We seek out evidence to validate our investment decision and ignore those that suggest otherwise.

09. Availability bias – we are influenced by the things we observe. If people we knew made a lot of money through property investment, we will think that properties are the best investments in the world and develop a preference for it.

10. Loss aversion bias – we want to be compensated for high returns before we decide to take the risk to invest. We often wait for markets move and show high returns before we want to invest. We are not interested if markets are not moving.

11. Hindsight bias – we tend to say “I knew it” after an event has happened.

12. Survivor-ship bias – we only get to hear stories of successes but many stories of failures were untold. See No 2 and No 3.

13. Most us do not know what we want in life. We think we will be happier with more money.
By Alvin