Stock markets move erratically in shorter time periods, but in longer time periods such as 10 years or 20 years or even more, stock markets generally move upwards (since inflation is a global phenomenon affecting everything that has a price tag).
However, periodically the stock market crashes on its own weight and the economy enters a depression.
Usually, the crash happens at the peak of a bull run, where stock prices keep on going up making everyone rich.
At that exact point in time, people suddenly want to take profit and sell off.
And poof - a surge of supply drives the prices down to rock-bottom.
Take note though - this plummeting price has no bearing whatsoever towards the actual value of the stock.
It's merely a representation of what people are willing to pay for a given stock.
When prices are this low, the people who rode the wave up come crashing down.
And, they sell to the first bidder - which HAS to be you! Especially if you know very well that the stock you want to buy are stocks of a very good, stable company.
There is a truth to Warren Buffet's saying, Be greedy when others are fearful.
Since you're one of the few buying stocks during the depression, you'll most likely be able to buy a lot of stocks at rock-bottom prices, ensuring that you will be collecting a handsome profit when the market picks up again.
However, be wary of selling too early for the market to fully recover - don't try to sell at the moment you see a profit can be made.
Wait until you see the stock prices move sideways erratically again.
When that happens, you'll know that the cycle is mature and you have to sell sooner than later when the market crashes again.
With fresh capital in your hands, go out and buy the cheap but immensely valuable stocks once more - and repeat the process ad infinitum.
This is a baffling art of speculation, but remember - having a system for investing in stocks is worth its weight in gold.
You can never profit from the stock market without a good strategy already laid out beforehand.
Study the market, observe what the experts say and how it affects stock prices, get used to it, and gain experience over time.
The important thing is consistency in studying the markets and the behavior of the people involved in it.
However, periodically the stock market crashes on its own weight and the economy enters a depression.
Usually, the crash happens at the peak of a bull run, where stock prices keep on going up making everyone rich.
At that exact point in time, people suddenly want to take profit and sell off.
And poof - a surge of supply drives the prices down to rock-bottom.
Take note though - this plummeting price has no bearing whatsoever towards the actual value of the stock.
It's merely a representation of what people are willing to pay for a given stock.
When prices are this low, the people who rode the wave up come crashing down.
And, they sell to the first bidder - which HAS to be you! Especially if you know very well that the stock you want to buy are stocks of a very good, stable company.
There is a truth to Warren Buffet's saying, Be greedy when others are fearful.
Since you're one of the few buying stocks during the depression, you'll most likely be able to buy a lot of stocks at rock-bottom prices, ensuring that you will be collecting a handsome profit when the market picks up again.
However, be wary of selling too early for the market to fully recover - don't try to sell at the moment you see a profit can be made.
Wait until you see the stock prices move sideways erratically again.
When that happens, you'll know that the cycle is mature and you have to sell sooner than later when the market crashes again.
With fresh capital in your hands, go out and buy the cheap but immensely valuable stocks once more - and repeat the process ad infinitum.
This is a baffling art of speculation, but remember - having a system for investing in stocks is worth its weight in gold.
You can never profit from the stock market without a good strategy already laid out beforehand.
Study the market, observe what the experts say and how it affects stock prices, get used to it, and gain experience over time.
The important thing is consistency in studying the markets and the behavior of the people involved in it.