Dear investors, welcome to PhillipCFD’s market talk.

Equity Markets are at resistance so we expect a consolidation or a correction in the near term. However, markets are likely to use corrections to load up in anticipation of a wave of expanded Quantitative Easing from the west and a fiscal stimulus from China. Therefore, we believe profit taking is only short-term and the equity market would continue to rally for the foreseeable medium term. We like growth stocks, such as the technology sector, as they tend to perform even when the overall market is down.

Alternatively, investors can choose to invest in Exchange Traded Funds that diversifies into various sectors. ETF such as the SPDR S&P 500 tracks the S&P 500 Index and allows investors to be exposed to 500 of the largest companies traded in the US.

Investors can utilize instruments like Contracts for Difference or CFD for short, to diversify or hedge their positions.

Take for example, an investor who longs Apple stocks, which has reached historic highs, can hedge his position by shorting Apple CFD. Alternatively, investors can hedge their long position on Apple by shorting a company in the same sector, like Hewlett-Packard CFD.

CFD allows investors to diversify their portfolio because it requires margin as low as 10% of the contract value, thus freeing up your capital to diversify into different sectors or countries. Phillip CFD offers counters of different market sectors across four different countries.

Thank you for watching PhillipCFD’s market talk, tune in next week for more.