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| Friday, June 29, 2007 |
| Fatal error in system |
Initially I thought if lets say I have 3 lots of rotary using cash bought at $1 and 3 lots of rotary bought at $1.10, the average cost should be $1.10.
But thing is, because when you are using CFD, the cost isn't just 3000 x $1.10. It is actually 3000 x $1.10 / 5. But if we use this formula, the cost average of Rotary would be [($1 x 3000) + ($1.10 x 3000 / 5) ] / 6000 = $0.61??
But that also means the risk per unit cost is magnified.
Hmm.. maybe this is a more accurate way calculation, so i guess there are two ways now. First, CFD positions should not be mixed with the cash portions. Secondly, I will use this new averaged cost since it will make me have a clearer picture of the whole portfolio.
But seriously, I think I really overlooked this point. Failed to grasp the over exposed risk. Any readers, if any, care to comment if I overlooked anything?Labels: NenixDreams Fund |
posted by Nenix @ 10:36 AM   |
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| NenixDreams Fund |
| Fund launchprice on 1st August 2006= $1
Target for 2007 = Beat STI index
Current price of NDF as of 1st Oct 2007 = $1.58
Current price of STI as of 1st Oct 2007 = $1.54
Difference with STI index is 0.04
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