Risk-taking investors have reaped significant gains in active securities and commodities trading as well as foreign exchange dealing over the past year. The positive sentiment is expected to spill over to the new year, although finance and investment consultants caution that a more prudent strategy should be adopted. An unexpected strong rebound in the US dollar this week saw Hong Kong stocks fall 2 per cent in one day, but the trend of a weakening United States dollar is expected to continue and to dominate the global investment environment. It is time to spread risks and put the bet on selective market products. Simon Luk, general vice-president of investment consultant Money Concepts, said prospects were cautiously optimistic with the relatively volatile US currency movement. He said investors should adopt a more conservative approach than last year and focus on niche markets. While the US government has held a weak US dollar policy, other currencies such as the Australian and Canadian dollars are expected to gain ground. Gold demand remains strong and its value should appreciate. Mr Luk said other investment focuses included the markets of natural resources such as gas and commodities in view of the increasing demand from countries such as China and India. He said the oil sector was also of good investment value while high-yield bonds would draw selective investors. Geographically, Asia remains the focus of attention due to its tremendous growth potential and business opportunities. Money Concepts is especially positive about technology stocks and will increase weight in this sector. As interest rates stand at virtually zero, people are keen to look for opportunities to invest in select products rather than putting their money in banks. Simon Ting, senior vice-president of financial service consultant Refco Hong Kong, said dealing in commodities futures contracts had generated the best return for investors, with high market volatility in the past year. Industrial metals such as copper and aluminium have been in demand, while gold and crude oil prices have gone up. Mr Ting said several wealthy mainlanders looking for high returns had joined the stream of investors in Hong Kong. 'These cash-rich mainlanders are willing to bear high risk to invest in futures contracts, and they come through Hong Kong to do the deals,' he said. Refco Hong Kong recorded an encouraging growth in the turnover of its futures trading business for individuals as well as corporate and institutional investors last year. The company provides its brokerage services for trading relating to stock and index futures contracts as well as commodities and metals futures trading in major international markets. Mr Ting said the investment prospect this year would be cautious after last year's strong rally, while the market volatility was likely to reduce. He expected the US dollar to stage a rebound in the short term. But the pick-up would not last long and the greenback would revert to a continuous downtrend later in the year, he said. In all, it is a general consensus that the Asian market will continue to lead growth momentum worldwide. Graham Bibby, managing director of Richmond Assent Management, said the general market should see more upside this year. 'Our momentum analysis identified Indonesia and India as having been the two top-performing markets early on,' he said. 'Now we see Europe moving near to the top of the momentum. The strength in the euro, we believe, could well force improvement in corporate efficiencies in Europe and, perhaps, a spate of mergers and acquisitions in an attempt to improve competitiveness.' The strength of Richmond is in dynamic asset allocation that seeks absolute returns for investors. Mr Bibby said the company's focus was on momentum analysis combined with fundamental analysis, and the use of stopping losses to exit and avoiding remaining invested during prolonged downtrends. 'A continuation of dynamic asset allocation and identifying trends at an early stage will become even more important,' he said. 'We believe a buy-and-hold strategy will find it difficult to make consistent returns over the next five to 10 years.'