How did I start as an investor?

I am a Computer Systems Engineer working for a large Multinational in Europe since 2002. In the period between 2001 and 2005, I followed closely the performance of the company in the local stock market. Due to my job characteristics, I was part the insider group, which meant I couldn’t invest in stocks of my own company, but this diverted my attention to other European equity markets in general which at that time had extraordinary performance indicators. I mention this to show you that you don’t need to be an economist or a business man to invest, you just need to like learning, keep yourself informed and be disciplined.

In 2005 I started investing in stocks, even though I had very little experience I had an average profit of 8% per month.

Given the fantastic results I was having in stocks I decide the start trading CFDs. Contract for Difference (CFD) is a great way to leverage and/or scale up your investment. For an aggressive investor this instrument can scale an 8% profit to 80%, with the same invested capital. You can scale up your investments, but at the same time you risk a much high percentage of your capital. This risk was easily ignored when you have as stable market as the one between 2003 and mid-2006.

The good old times: Stocks Continious growth > 145% in 4 years
source: finance.yahoo.com

When the Stock marktet began to shake!
source: finance.yahoo.com

The Big Fall

In Q3 2006 the global equity markets began a series of sudden corrections, which were the first indications of the crisis to come. Most advisors would have recommended keeping the positions open until the corrections are completed and the market retakes momentum. But in reality, stock positions open during 2006-2007 represented losses of more than 40%. Keeping CFD positions open produced automatic closures of positions losing between 85% and 105% of the capital. Then, as you know and followed in news media, the stock market kept on falling; producing the biggest losses in equity markets ever and transforming the stock exchange into a volatile, incomprehensible, risky and feared environment for both amateurs and professional investors.

By Q1 2008 I had lost all my capital, but to be honest I am now glad of losing it then and not being part of all the suffering and stress other investors had to go thru in 2008 and 2009.

What to do now?

No one knows what will happen to equity markets; it might take up to 12 years to recover the stability and capitals the market had in early 2006. Many investors recommended shielding under the foreign exchange market, and that is what I have done since then.

Let's compare the how the USD reacted to the equity market fall.

The performance and trading volumes of the US Dollar changed dramatically, just before the equity markets reach their lowest marks. This can be attributed to the fact that investors found in foreign exchange a much calmer and predictable environment, and due to the capital shifts from equity to Forex , the FX market has now the dynamicity that ambitious investors like in order to produce high profits. Nowadays, I invest with less capital than in the equity market, with a much more constant profit index and less stress over my positions. A controlled and disciplined strategy supported by constant reading and new updates can provide you an investment knowledge and approach that can guarantee your economic safety for the next decade. Do as me and join many other amateurs and professional investors in the market that has the biggest expectation of performance during the next 15-20 years.