Our correspondent reports: The final session of the "2004 Forex Investment Lecture — The Gold-Digging Opportunity Has Arrived," hosted by KVB Kunlun, concluded successfully on September 25. According to the organizers, four sessions were held in total, all of which drew a strong following among investors, with every session fully booked in advance. This lecture series focused primarily on analyzing the high price level recently reached by the NZD/AUD, providing investors with an in-depth breakdown of strategies and recommendations for this investment opportunity. One investor told our reporter after the event: "KVB Kunlun should hold lectures like this once a month."

Why was this lecture called a rare "gold-digging opportunity"? Why is the current NZD/AUD price level described as a once-in-a-decade occurrence? The lecture's keynote speaker, Mr. Jimmy Xu (Xu Ziyu), Forex Dealing Room Manager at KVB Kunlun, explained that according to more than a year of tracking, research, and analysis by KVB Kunlun's investment advisory team, the current NZD/AUD price level is one rarely seen in over a decade. From a technical perspective, over the past 10 years the NZD/AUD has fluctuated between 0.9515 and 0.7312, never breaking through 0.9515; at the same time, since September 2000, the NZD/AUD has been climbing steadily. On the other hand, from a fundamental perspective, many of New Zealand's economic indicators — such as GDP, retail sales growth rate, consumer price index, and unemployment rate — are superior to those of Australia. Combining fundamental and technical analysis, KVB Kunlun ultimately presented investors with a forecast for the NZD/AUD trend over the next 3 to 6 months, concluding that as long as investors seize the right timing, investing in the NZD/AUD will bring them stable returns. Jimmy also noted that although forex investment is a high-risk, high-return endeavor, what the NZD/AUD currently offers investors may well be a rare low-risk, high-return opportunity.

Our reporter observed at the lecture venue that the atmosphere was exceptionally lively, with investors showing great attention and interest in this investment opportunity, engaging in discussions with KVB Kunlun's investment advisors one after another. After the event, many investors expressed their intention to open forex margin trading accounts with KVB Kunlun as soon as possible, and some clients even opened margin accounts with KVB Kunlun immediately after the lecture concluded, in order to seize this once-in-a-decade investment opportunity, hoping that KVB Kunlun would continue to provide recommendations on NZD/AUD entry timing and stop-loss placement over the next 3 to 6 months. In response, Jimmy stated that KVB Kunlun would, in the near future and in accordance with the needs of clients and investors, publish more timely investment information about the NZD/AUD on the KVB Kunlun website www.kvbkunlun.com, helping investors better seize investment opportunities.

As a leader in the local financial market, KVB Kunlun has always provided investors with the most professional investment products. In September of last year, KVB Kunlun was the first to launch the first Chinese-language forex margin trading platform in New Zealand and Australia — Forexstar. To better introduce this platform to investors, it specially invited Mr. Huang Bozhong, a renowned forex expert in the Chinese investment community in Hong Kong, China, and Asia, to host the "Gann Theory International Forum" in Australia and New Zealand, bringing high-level investment information and investment strategies to local investors. Last year's lecture brought the latest investment concepts to overseas Chinese investors who have long lived abroad, while this year's lecture, with its specific investment targets, offers investors more direct profit opportunities.

With the development of the Internet, the Internet now stands alongside traditional media as a new medium of communication, its speed and comprehensiveness already surpassing the functions of traditional media. The traffic volume of a website indicates, on the one hand, the website's popularity, and on the other hand, its brand recognition. Currently, users visiting the KVB Kunlun homepage come from more than 50 countries across all five continents, with an average of nearly 20,000 users visiting the KVB Kunlun homepage each day and a daily click-through rate exceeding 400,000. The vast majority of these come from New Zealand and Australia.

Recently, the KVB Kunlun website has undergone a complete redesign, presented to visitors with a more professional and fresher design that also better aligns with the company's development goals of ongoing internationalization and globalization, while more fully embodying KVB Kunlun's position as a leader in the financial investment industry in the Oceania region. They believe that as the new homepage provides more comprehensive information, the traffic volume of the KVB Kunlun homepage will increase even further, more fully meeting the demand for financial information among Chinese communities in Oceania, and winning even more of their favor.

KVB Kunlun offers a Chinese-language website and a Chinese-language hotline to serve its Chinese clients. Website: www.kvbkunlun.com

A Once-in-a-Decade Price Level 燭he Opportunity Has Arrived — Do You Know How to Seize the Investment Opportunity?

Our correspondent reports: The NZD/AUD price level and how to seize buying and selling opportunities were the focus of this lecture, and KVB Kunlun's forex trading team conducted a detailed analysis for investors.

After the NZD/AUD rose to a high of 0.9515 on July 31, 1995, it never broke through that high again in nearly a decade, subsequently declining steadily until it bottomed out at 0.7312 on September 3, 2000 — also the lowest point in nearly a decade. Over the following four-plus years, New Zealand's economy performed better than Australia's, and the NZD/AUD climbed steadily, advancing all the way to 0.9374 on January 26, 2003, before undergoing a sharp correction to 0.8486 on April 19, 2004, then continuing to rise to 0.9504 on September 9, 2004 — just a step away from the decade high of 0.9515 set in 1995. From a medium-term perspective, the NZD/AUD is currently in the region of a historic high. Unless the NZD/AUD effectively breaks through the decade high of 0.9515, it will slide rapidly downward. It is anticipated that the room for the NZD/AUD to continue rising will be very limited, while the probability of a gradual decline is extremely high. Looking at the NZD/AUD trend over the past decade, its fluctuations have consistently remained within the broad range of 0.7312 to 0.9515, never breaking through the decade high of 0.9515 — a price level that may well remain unbreakable in the coming years.

The NZD/AUD from a Fundamental Perspective

From a fundamental perspective, the main factors influencing the NZD/AUD trend include the economic conditions of the two countries, political and military conditions, and the trends of other markets — such as fluctuations in the New Zealand and Australian real estate markets, stock markets, and futures markets, all of which affect the NZD/AUD. Both the NZD and AUD are commodity currencies, so fluctuations in global commodity prices affect both currencies.

Since November 2002, New Zealand's annual GDP growth rate has consistently exceeded Australia's (see Figure 2), which is also the most important reason supporting the strength of the NZD/AUD. However, in terms of total economic output, Australia's GDP is six times that of New Zealand; the New Zealand economy and the Australian economy are not on the same scale, and the continued rise of the NZD/AUD cannot continue indefinitely. Comparing the interest rates of the two countries (see Figure 3), New Zealand's rates from one to ten years are all above Australia's, with the interest rate differential generally maintained within 1%. Recently, the Reserve Bank of New Zealand indicated that there is at least one more opportunity for a 25-basis-point rate hike within the year. Meanwhile, Australia will hold its federal election on October 9, and history shows that the Reserve Bank of Australia has no precedent of raising rates before an election, so the probability of an Australian rate hike toward year-end is relatively high, at which point the interest rate differential between the two countries will be between 1.00% and 1.25%. Over the past two years, New Zealand's retail sales data have also consistently been higher than Australia's, reflecting stronger domestic consumer demand in New Zealand than in Australia. Since June 2002, Australia's inflation rate has consistently been higher than New Zealand's, which is also an important reason the Reserve Bank of Australia is expected to continue raising rates at year-end. New Zealand's latest June unemployment rate was 4%, a 17-year low, while Australia's unemployment rate has recently been consistently higher than New Zealand's. This also indirectly reflects that New Zealand's job market has become saturated, and the signs of a shortage of skilled technical workers have become increasingly evident, which will become a stumbling block to the continued strengthening of the New Zealand economy.

From this, we can observe that in recent years New Zealand's overall economic performance has been better than Australia's, but because New Zealand is constrained by bottlenecks in its own economic scale and human resources, its economic growth cannot remain strong indefinitely. Both the Governor of the Reserve Bank of New Zealand and the International Monetary Fund have indicated that New Zealand's economic growth may achieve a soft landing next year. This year the Reserve Bank of New Zealand has already raised rates six consecutive times, with two more rate hikes expected within the year. Clearly, the central bank's rate hikes are intended to control the overheating of the local real estate market and an excessively high inflation rate, preparing for a soft landing of the New Zealand economy. Economists at Westpac believe that the New Zealand real estate market peaked in September of last year, and the latest housing data also support this view — in August, the rate of increase in the median house price across New Zealand had approached zero. The signs of New Zealand's economy peaking are becoming increasingly evident, and at the same time all the factors favorable to the NZD have already faded. In the short term, the NZD/AUD may rise due to the uncertainty surrounding the approaching Australian federal election. But from a medium-term perspective, New Zealand's economic growth is nearing its peak, human resource demand is near its limit, inflation is rising year by year, and the real estate market has also peaked. A weakening economy will directly lead to a decline in the NZD, ultimately causing the NZD/AUD to fall.

The NZD/AUD from a Technical Perspective

When discussing the technical analysis of the NZD/AUD, KVB Kunlun's Forex Trading Manager Jimmy stated that over the past decade, the NZD/AUD has consistently fluctuated up and down within the broad range of 0.7312 to 0.9515, and over the medium to long term it always returns to the midpoint price of 0.85. Over the past decade, it has returned to 0.85 a total of 27 times — on average three times a year. This year it has done so only once, reaching a low of 0.8486 in April, and there should still be an opportunity to see 0.85 in the remaining three months of this year. Many banking institutions in New Zealand share KVB Kunlun's view: the National Bank of New Zealand calculated the fair value of the NZD/AUD to be 0.8530 (Figure 4), which means that over the medium to long term the NZD/AUD will sooner or later return to this price level.

Seven Principles to Lock In Profit Opportunities

Of course, any investment carries risk — even running a bento shop on Queen Street carries risk. Some risks are worth taking, but others are not. The risk of short-selling the NZD/AUD at current price levels is relatively minimal, and from a reward-to-risk ratio perspective, such risk is entirely worthwhile. In the short term, the NZD/AUD may continue to rise, but over the medium to long term it will certainly fall — and the returns will be substantial.

Looking at it this way, making money seems easy and simple — just go back and sell, right? Is it really that simple? In fact, it is not. Drawing on his own experience, Jimmy said that over his past 19 years of trading, he has watched several thousand clients come and go, rise and fall. In reality, forex trading is a very simple matter, and based on his 19 years of forex investment experience, he has summarized seven principles of forex trading:

1. _ Be patient, don't be impatient. KVB Kunlun has a client in Australia, a lady who works at a travel agency and has the opportunity to watch currency fluctuations every day. Thinking she had a chance to make money, she opened an account with Kunlun, but by the second month she had nearly lost everything. She called Mr. Xu for help, and after hearing her account, Mr. Xu found that this lady was over-trading and too eager to make money. In the end, he gave her two words: "be patient." Now this lady is doing very well, earning one or two thousand US dollars each month before stopping to rest and then re-entering the market.
2. _ Determine your trading time frame. Determining one's personal trading time frame in the forex market is very important. Before entering the market, you must be clear about whether you are a short-term or medium-to-long-term investor. Some investors, after incurring losses upon entering the market, do not close their positions immediately, turning what was originally planned as a short-term trade into a medium-term one, and ultimately into a long-term loss. So investors must determine before entering the market whether they are trading for the long term or short term, and act according to plan.
3. _ Determine your trading strategy. In the forex market, you can make money both by buying long and selling short. After determining your trading time frame, you must determine your trading strategy — whether to buy or sell during that time frame — and not change your trading strategy lightly. You must decide whether to buy or sell, and not buy one day and sell the next. No one can consistently buy at the lowest point and sell at the highest point.
4. _ Adhere to discipline. The most important thing in forex investment is to have your own investment discipline. The first rule, of course, is to always set a stop-loss when entering the market. The forex market fluctuates dramatically, and prices may move one or two hundred points in a day. Don't assume that nothing will happen tonight — during 9/11, many people lost money precisely because they had not set stop-losses. And once you set a stop-loss, do not change the stop-loss price lightly due to price fluctuations.
5. _ Limit losses and let profits run. Losses are part of investing and can be viewed as the cost of doing business. Losses are not frightening, as long as you keep them within a range you can accept and control. Buffett has only two investment principles: the first is never to lose money, and the second is to remember the first principle. So the first thing to remember in any investment is: how to avoid losses, or minimize losses; profit comes second. It's just like a football match — a solid defense is the prerequisite for winning; otherwise, no matter how sharp the forward line, it's useless, because if the goals scored can't keep up with the goals conceded, you still won't win the match.
6. _ Never trade against the trend. Do not go short in an uptrend, nor go long in a downtrend. As the saying goes, "push the boat along with the current" — a key point in forex investment is to go with the trend. Only real-time price movements can reveal the true market trend, and the ultimate result of trading against the trend can only be losses.
7. _ Exchange rates may fluctuate to extreme price levels beyond your imagination. The NZD rose from 0.39 to 0.71, something no one could have imagined two years earlier. Forex trading must be approached gradually and patiently, as price fluctuations may move beyond the prices we imagine.

KVB Kunlun, a Trustworthy Financial Investment Institution

Our correspondent reports: According to the organizers, KVB Kunlun, the host of the 2004 Forex Investment Lecture, is advancing with solid steps into the international financial investment market, providing professional financial investment services to overseas Chinese. KVB Kunlun's Hong Kong company and its Melbourne, Australia company will both officially open for business in the near future, meeting the growing demand for financial investment services among overseas Chinese.

KVB Kunlun is the highest-tier licensed forex dealer in the Oceania region, as well as the most professional and largest Chinese-owned (non-bank) financial institution in the region, having earned very high praise from the industry. According to the organizers, all of KVB Kunlun's forex traders fully passed the qualification certification of New Zealand's financial regulatory authority, the NZX, in March of this year. In June of this year, the KVB Kunlun website www.kvbkunlun.com ranked 16th in traffic volume among all New Zealand websites — the only Chinese-language website to enter the top 20 — becoming the most popular and most-visited Chinese-language website in New Zealand.

In the face of the achievements already attained, a KVB Kunlun representative said: "Everything we do is for our clients, to give them the best service and to help them achieve the greatest investment returns. Take our self-developed trading platform, for example — it is designed to provide Chinese-speaking investors with a trading platform of their own, featuring not only 35 top-tier technical indicators, but also the ability to display charts and quotes on the same interface, with no trading commissions whatsoever. On the other hand, the real-time information updates on the KVB Kunlun website also provide the most timely information support for investors' decisions."