A Good Portfolio investment

05 February 2015


Long USD against EUR, JPY and AUD

  • The USD is set to continue its rally as the Fed prepares to finally raise its rates, while the EUR has just begun its QE of over 1 trillion euros. Meanwhile the BoJ has been on QQE for some time and plans to increase its purchasing to further create stimulus. (A clear policy divergence between the US Fed and the two markets being ECB and BoJ). This has analysts all over the world seeing the possibility of parity in the EUR/USD. The USD/JPY pair is seen going up to 124 and possibly higher.
  • The RBA cut its rates by 25bps to a record low of 2.25% and could further cut by another 25bps following the drop in commodity prices. Officials at the RBA say the Aussie is overvalued looking at its fundamental value. All of this points to a possible decline in the AUD/USD to 0.70 However for a more diversified investment strategy one will have to take into consideration the global unrest such the Russia Ukraine issues, ISIS and also the Global Growth concerns raised by the IMF. All of these result in traders wanting to hold “safe-haven” instruments such the JPY and Gold so for that reason I would also advice that one should buy Gold on dips and preferably in Euro terms and also buy the JPY against currencies set to drop such as the EUR and AUD. This is a short to medium term strategy of the classic buying low selling high and vice versa.


This has been the talk of the investment world for quite some time now since its fall due to decreased demand, I will be talking in terms of WTI oil also known as NYMEX instead of Brent although both follow each other. Oil is currently trading at around 50$ following a recovery from 44$, I see this as another opportunity to sell the commodity at these levels of 50$ - 55$ with a target of the psychological low of 40$. The recent recovery was based on speculation that the US is planning on cutting production but I don’t see that happening at these levels. Yes companies cannot keep on producing at such lows forever but like the analysts at JP Morgan and many others, I believe we need to see the price drop to 40/39 for the Saudis and OPEC to actually hold off production

Stocks and Indices

I’m a strong believer of Indices over single stocks based on the high returns from Indices.

Indices I prefer right now are those in the Euro-zone such as the German 30, France 40, Europe 50 and Italy 40, all simply because of the ECB’s QE, whenever such a program is started and when rates are low, the stock market rises. It was the same when the US Fed went through its QE program which it ended last year.

The Dax has been hitting record highs and I expect the momentum to continue and having it climb passed 11 000

With the RBA now climbing on the easing train I also favour the Australia 200 Index which has been on a rise for 5 consecutive days. I see it well above 6000 soon.

The Nikkei 225 is another of my favorites due to the easing conditions as well, I see it soon breaking that 18 000 resistance and going even higher. I’m sure you can now tell that I’m a man who still strongly believes that we are still in a bull market.

I also expect the US Indices to rise along with the market but the US market isn’t a favorite at the moment with the Fed expected to raise rates in the coming months, even the S&P 500 is now starting to show signs of exhaustion along with the rest. But overall the US Economy is on a good standing with unemployment now below 6%


On single stocks, I’m more focused on the tech industry and here are my stocks to have in your portfolio

  • Apple – Since the split of its stocks last year, I repeatedly advised people to buy shares as they’re now more affordable and it’s a company destined for greatness. At that time the stocks were trading at around 90$, now currently at around 119$. I still see this as a buy! The company has a lot of money for R&D and is using that money on big moves such as the acquisition of Beats by Dre which it just recently revealed that it wants to Beats' technology and music content to create a new paid streaming music service to compete with Spotify and Rdio.
  • Facebook – We all use it, everyday! And if we not using it we’re probably using something else owned by Facebook such as Instagram or Whatsapp or even Opera mini on our devices. Fact is Zuckerburg is fast becoming the man behind the entire world’s social connectivity and as the number of users grow as it was shown last year. And now also revealed that the company is investing in Artificial Intelligence. Its stock price has lost some steam just below the 80$ resistance which it recently broke through but failed to hold. This is still a stock to have and I believe that by next year it will be over 100$/share
  • Tesla – The world’s very own Tony Stark of the Movie Iron-Man and Mzansi’s own Elon Musk. He is one big dreamer who seems to turn all his dreams to a reality, a driverless car, a taxi to space, an electric car, you name it and he’s in it. The Tesla shares dropped with the price of oil as the demand for his electric cars is now expected to decline, but looking at the bigger picture, in the longer term this is what people will be driving and you can be one of those people who can say I bought the stocks when they were still just over 200$/Share

I could go on and on about many companies and stocks but to save you time, I’ll just name a few more stocks to have: Google (world’s largest search Engine that’s now venturing into cars and transportation among many other things), Netflix (the future of television), Sasol ( as oil prices go up again, which they most definitely will, so will this its share price)

And remember!

Financial instruments trading involves substantial risk of loss and is not suitable for all investors

AUDUSD currently trading just above 0.78 after recovering from four year lows below 0.76 after the RBA cut rates. USDCAD currently trading above 1.25000.

  • Sell AUDUSD at current levels 0.7810/80 with target at 0.72
  • Buy USDCAD on dips with target at 1.30
  • German 30 (also known as the DAX) is currently trading at around 10 900
  • Buy Dax on dips towards 10 000 with target above 11 200
  • Buy Europe 50 with target above 3 900
  • Buy Japan 225 on dips towards 17 300 with target above 18 000
  • Buy Australia 200 at current levels of 5 700 with target above 6 000
  • Buy USDJPY on dips towards 116.50/80 with target at 122
  • Buy XAU/USD on dips towards 1200 with target at 1300
  • Sell NZDJPY on rallies towards 90.00
  • These are all ideas based on analysis and speculation using many different sources and strategies, there is no guarantee of profits from them so the choice to use them solely rests on you…BUT I BELIEVE IN THEM.

    Theo Mbadaliga
    Dosiusbald Holdings (PTY) LTD

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