Striking the Perfect Balance in Investment: Merging Short-Term Agility with Long-Term Growth

Good evening, everyone!  

I’m thrilled to connect with all of you here at Diamond Ridge Financial Academy. It’s a privilege to share some of the latest investment insights with you tonight. My goal is to inspire and support you on your investment journey, helping you achieve steady progress and even greater success!

Yesterday, we dove into the strengths and weaknesses of the traditional finance industry. While traditional financial systems have played a key role in economic growth, the rapid rise of technologies like AI, big data and blockchain has exposed their inefficiencies, slow responses and lack of innovation. This explains why UK funds have experienced continuous outflows for nine straight years.

In investing, whether you’re picking an industry or a strategy, staying in sync with technological innovation is crucial. Tech innovation not only boosts a company’s competitiveness but also opens up bigger opportunities and better returns for investors. Hot sectors like renewable energy, AI and quantitative investing are where the market’s focus is right now, and they hold huge growth potential and opportunities for gains.

As modern investors, we need to focus on industries and strategies tied closely to innovation while constantly learning and building on our experiences. This helps us adapt to market changes and stand out in the global competition. It’s like life itself continuous learning and growth allow us to see more incredible views along the way.

Here at our academy, we’re committed to helping you grow through learning and build your path to wealth. You’ll gain cutting-edge investment knowledge, master effective strategies and connect with like-minded peers. Make the most of this valuable learning opportunity, join our online sessions and let’s work together to explore the road to financial success and create a better future.

Before we dive into tonight’s session, let’s take a quick look at today’s stock market performance.

Today, the UK stock market saw a rebound with the FTSE 100 index climbing 0.83%. The index was led by strong gains in the mining sector, thanks to a global rise in commodity prices. Even though market concerns remain over the shaky UK government bond market and a weak pound, the FTSE 100’s global focus helped it dodge the negative impact of domestic issues. In fact, the weaker pound actually gave it a boost. Meanwhile, the FTSE 250 index recovered slightly after a sluggish morning. Other major European markets, like Germany’s DAX were flat while the Eurozone’s STOXX 600 posted small gains.

On another note, several North American banks announced they’re rethinking their membership in the Net-Zero Banking Alliance with some possibly exiting. This shift ties closely to policy changes under the new US president, Trump and reflects doubts about the sincerity of green policy promises. The UK government pushed back against criticism of its fiscal policies, saying it’s committed to managing public finances and boosting economic growth

The pound’s continued weakness and UK government bond yields hitting decades-high levels pushed gold prices (in pound terms) to a record high, reflecting worries about the UK’s finances and economic outlook. Additionally, the departure of CFOs from several UK-listed companies added to concerns over macroeconomic and geopolitical uncertainty. On a global scale, the economic fallout from wildfires in Los Angeles has cast further doubt on the global outlook.

In short, European markets showed mixed results today under complex geopolitical and economic conditions. The FTSE 100’s strong performance was mainly driven by higher commodity prices lifting the mining sector and its global nature acting as a safe haven. However, the weak pound, soaring bond yields and doubts over the government’s fiscal policies remain heavy clouds over the UK economy and market.

Stock Operations for UK stocks, Rolls-Royce remains a hold. Although it has seen some adjustments recently, it’s still in a profit position and the overall trend remains solid. After the current consolidation ends, a sustained rally is expected. Some members are concerned about trades in tech stocks like Trump Media & Technology Group (DJT) and Coinbase, asking when to take profits.  

Taking DJT as an example, the last swing trade began on Nov 27 at around $30.5. Our first target was $36 and the second target was near $40. Although the Dec peak only reached $38.8, we clearly advised reducing positions. Members who followed the late Nov entry saw at least a 25% gain.  

Later, on Dec 20, DJT pulled back to around $33 and I recommended adding or re-entering. While it didn’t rally significantly after that, it did climb to about $37. Even without short-term trades, holding the stock until now is still profitable, though with smaller gains.

DJT’s current performance is modest, but its fundamentals are strong, especially in digital media and the digital economy, where it has great growth potential. The company benefits from its strong brand, Trump’s massive fan base and social resources, which are its core strengths. Moreover, DJT is actively expanding into digital media and technology, leveraging innovation and new business models to tap into new markets, providing a solid foundation for future growth.  

From a policy perspective, the incoming Trump administration is a major positive for the company. Trump himself has a direct influence on the company's direction and strategic planning. His policy stance and access to government resources could create huge growth opportunities for the company. For example, the Trump administration might introduce policies that benefit the digital economy, like tax cuts and deregulation, which would directly boost DJT's business growth and profitability. Additionally, the Trump administration might increase investment in the media and tech sectors, which could indirectly enhance DJT's market position and competitiveness.

For these reasons, we’ve approached DJT as a long-term investment, using short-term market fluctuations to adjust positions flexibly. Assuming no systemic risks arise, DJT’s stock price is expected to rise significantly as US policies take effect and Trump officially assumes office. This optimism isn’t blind but based on a thorough analysis of the company’s fundamentals, policy environment and market trends.  

For those who recently joined the DJT trade and feel unsure, looking at the bigger picture shows how precise our strategy has been. Even as the Dow Jones Index fell over 6% since early Dec, with more than 80% of US stocks declining over the past month, DJT has shown resilience.  

Even the weakest performing stock, Coinbase, has seen major adjustments due to the ongoing tech stock and BTC declines. However, members who followed support and resistance levels for position adjustments are also in a floating profit position for this stock.

In addition, over the past two months, we’ve also traded a number of tech-focused stocks, including SMCI, Tesla, Terawulf Inc. and Rolls-Royce, all yielding substantial profits. The lowest gain exceeded 15%, while SMCI’s profit was over 85%. Some of our more aggressive traders also participated in short-term trades like Quantum Computing (as shown in the chart above) and achieved impressive returns. The stock eventually surged to $27, with a 380% increase during the period. Although many traders took profits early, this clearly demonstrates the effectiveness of our trading strategies.

Our ability to achieve such precise trading results relies heavily on the professional guidance of our Chief Analyst, Mr. Hanover and the support of our quantitative trading system. Mr. Hanover, with his extensive market experience and accurate grasp of macroeconomic trends, provides us with reliable investment directions. Meanwhile, the quantitative trading system uses complex algorithmic models to deeply analyze market data, helping us identify buy and sell opportunities more precisely and effectively reducing trading risks.

However, we must acknowledge that unrealized losses are inevitable in investing. Over the past month, global markets have been highly volatile, with over 80% of stocks declining. This means we must accept and allow some fluctuation in the stocks we hold. This does not suggest any flaws in our strategy but reflects the inherent risks of the market, which no investment strategy can entirely avoid.

What’s crucial is to stick to sound investment principles, strictly follow risk management strategies and remain rational when facing unrealized losses to avoid emotional trading. Only by doing so can we achieve steady returns over the long term and ensure sustained wealth growth. We always adhere to a value investing philosophy combined with quantitative analysis, striving to maximize investment returns while keeping risks under control.

Recently, some members have expressed doubts about our trading strategies and part of the reason is that many are unclear about the difference between short-term and long-term investment strategies. Many have asked: Should we focus on short-term trading for quick profits or stick to long-term investing to benefit from the power of compounding over time? In fact, this is not an either or question. It’s about finding the right balance between the two. A strategy combining both short and long-term approaches can maximize their strengths and achieve steady profits even in volatile markets.

The core of short-term trading is to quickly capture short-term market fluctuations and generate profits through high-frequency trades. This type of strategy relies on technical analysis, where traders use signals like candlestick patterns and moving average breakouts to identify entry and exit points. Typical holding periods might range from a few hours to a few days.  

Short-term contract trading is particularly attractive because it allows traders to use leverage to amplify returns. For example, in forex or index contract trading, leverage can turn small market movements into significant profit opportunities. Coupled with flexible two-way trading (long and short positions), investors can profit even in falling markets. This feature suits those seeking high capital efficiency and willing to take on short-term risks.

Long-term investing takes a completely different approach. It focuses on deep research into macroeconomics, industry trends and a company’s fundamentals to find growth potential assets for long-term holding. High-quality long-term investments typically include core assets like leading tech stocks, companies with scarce resources or blue-chip firms with strong resilience to economic cycles. In addition, assets like artificial intelligence and renewable energy are also popular choices for long-term investments.  

The biggest advantage of long-term investing is that it avoids the noise of short-term market fluctuations and fully leverages the power of compounding to build wealth. For example, dividend returns and steady growth from mature companies can generate significant cumulative gains over time. At the same time, long-term investors often follow a "buy-and-hold" strategy, reducing trading frequency. This helps avoid mistakes caused by emotional decisions to a certain extent.

Combining short-term and long-term strategies isn’t just about using both approaches at the same time. It’s about flexibly switching between them in different market conditions or executing complementary strategies to achieve steady profit growth.  

Short-term trading provides cash flow and flexibility to a portfolio. By capturing market swings through short-term trades, investors can lock in quick profits and improve cash flow and fund efficiency. On the other hand, long-term investments act as a safety cushion and growth foundation. During volatile market periods, long-term positions offer confidence and resistance to downturns, shielding investors from emotional decisions driven by short-term fluctuations.  

For instance, an investor may build long-term positions in the renewable energy sector while using short-term trades to target trending stocks or high-volatility contracts. When the renewable energy sector enters a growth phase due to favorable policies, long-term investments deliver steady gains. During market pullbacks, short-term trading can adjust quickly and use leverage to amplify returns, balancing portfolio volatility. This combination of strategies not only optimizes the risk-return ratio but also provides greater flexibility for investors.

Both short-term and long-term strategies have unique advantages and suitable applications. While single strategies are easier to execute, they often struggle to deliver consistent profits in a fast-changing market. By designing a well-balanced plan that combines the flexibility of short-term trading with the stability of long-term investing, investors can achieve steady gains while managing risk effectively.  

Going further, investors can even leverage the strengths or information gaps between different asset types for arbitrage, generating more stable excess returns. This kind of arbitrage strategy is a dream for many investors and a focus of research and practice for major financial institutions. It requires investors to have a deep understanding of different markets and be able to keenly capture arbitrage opportunities in the market.

Our chief analyst, Mr. Hannover, has recently completed the preparation for the public test of the quantitative trading system and will be delivering an exciting presentation this weekend. He will dive deep into the "Asset Arbitrage Theory," developed from years of investment experience, offering valuable learning opportunities for those who want to master arbitrage strategies. Mr. Hannover’s presentation will not only cover theoretical knowledge but also include many case studies, helping everyone better understand and master arbitrage techniques for practical use. If you want to achieve long-term, stable profits, don’t miss this rare learning opportunity!

That’s all for tonight’s session. In the next class, we’ll dive deeper into the layout strategies for different asset types. I hope tonight’s content helps everyone better understand investment strategies and set clear goals for 2025.  

At the same time, I also look forward to more investors joining our online investment courses. Here, you’ll not only gain access to systematic professional knowledge, real-time market analysis and investment guidance.  

Additionally, you’ll have the chance to participate in the Public Test of our upgraded quantitative trading system this month. This system, enhanced by years of model optimization and data training, excels in tracking trends and trading efficiently across multiple asset types. Join us to explore smarter, more efficient strategies and take your investment returns to new heights!  

From tonight’s session, please think about:  

1. What are the differences between short-term and long-term strategies? What are their strengths and weaknesses?  

2. What type of investment strategy suits you best? What’s your profit target for this year?