If your investment horizon is several years, it is perhaps not so important whether you invest in cyclical stocks, or the more defensive stocks. Yet it may be worth to take a closer look at the defensive stocks as you get closer to the time when you plan to make use of your savings.
But let us clarify that there is no scientific evidence that one type is better than the other type of stocks over many years. The discussion goes on whether you have the ability to jump on and off cyclically trends before anyone else, and it is a decision you must make for yourself.
Saturday, September 10, 2011
Friday, September 9, 2011
Cyclical stocks for people with confidence
As you might know its smart if you buy a stock cheap and sell expensive. It’s even smarter if you can buy rapidly rising stocks in good times and then replace them with stable when the stock prices start dropping.
It's easier said than done, but it is still a discipline that every equity analyst will try to convince you that he is the champion in. Before you even begin to trade shares on the stock market peaks and valleys, it might be useful to note that private investors indeed constitute a significant proportion of trades on the exchange. But when it comes to volume, it turns out that private investors represent only a marginal proportion of total trade. Put another way: The professionals roll you down, if you're venturing out into a showdown with them.
It's easier said than done, but it is still a discipline that every equity analyst will try to convince you that he is the champion in. Before you even begin to trade shares on the stock market peaks and valleys, it might be useful to note that private investors indeed constitute a significant proportion of trades on the exchange. But when it comes to volume, it turns out that private investors represent only a marginal proportion of total trade. Put another way: The professionals roll you down, if you're venturing out into a showdown with them.
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