So, this is my summary from Round 2 - Part 1.
Part 2 will commence once the markets are looking good again !
I finished up on £8,352 in profit which is great, not nearly what I had achieved in Round 1 (yet) but given the time frame I am aiming at here, I am perfectly on track to double my money within a year.
Some interesting points are; Firstly, I started shorting stocks this time round. Secondly, I started betting on indices, which in hindsight was a big mistake.
I have had so many questions from readers in the past about my hedging strategy, and the way the markets looked to be going it seemed to becoming more apparent that I should possibly be looking at one.
I looked into various ways to hedge; shorting an index, shorting stocks or buying options. I didn’t go for options as they are expensive and complicated, my bets on the indices didn’t work, but my shorts on stocks worked out.
I lost a massive £8,304 on my FTSE250 short. This was clearly a big mistake. it doesn't really make sense betting on an index going down when all your other bets are long. Having some short bets in my portfolio is not a bad idea, with sticking to the same rules I do as any other bet, but taking a huge bet on a index is risky.
I need to take a view on the market and back myself for that view. I can always hedge myself with a few opposing bets but the majority should follow my overall sense of the market.
Anyway, lesson well learnt and I ended up £2,000 better off with my shorts, so all in all, not bad (it could have been a lot worse).
I have also included a table showing my running profit & loss day to day with a comparison to the FTSE250, FTSE100 and FTSE All Share indices. I am not sure exactly what this tells me yet but it is interesting nonetheless. I need to so some more analysis.
Other stats; my average bet was 19.5 days (including weekends). I earned a respectable 18.56% return on my money invested.
Happy investing to you guys, I hope that you are navigating these choppy waters without too much disaster. I'll be watching the markets for some kind of entry signal.
Until then...
(Please note that the numbers below were entered manually by me, so there might be some fat finger issues - please let me know if you find any problems with them but I will go through them again tomorrow as I need to do some proper analysis on them)
