Investing Advice

Stock Market Cycles

Are there market cycles that an investor can take advantage of? You bet!

There are more bull markets than bear markets, and they last longer. Since there are historically three, 32-month periods of generally rising prices for every one 9-month period of falling prices, you can take advantage of this fact by just staying in the market all the time, preferably with an index mutual fund. This will make you a winner 3 out of every 4 years. What could be simpler?

But shouldn't you take your money out of the market during the down years? Well sure, if you can accurately determine the top and bottom of the market. Otherwise you will end up getting out too soon or too late, and back in either too soon or too late.

The big gains made over the past 25 years were concentrated in just 215 out of 9,100 days. If you were out of the market on just some of these days, you missed out big time.

I will point out that there seems to be an advantage in avoiding September and early October. June, July, and August are under-achieving months also.

Look at this. If you put $10,000 into the S&P 500 each May 1 and then sold on October 3, each year from 1950 to 1999, your total profit would be $11,740. But if you put that same $10,000 in on November 1 and sold on April 31, your profit would have been $386,384. Make sure you are fully invested from November through April.

Other Stock Market Basics Topics:

  1. Stock Market Investing the Right Way
  2. More Stock Marketing Investing
  3. How to Pick Winning Stocks
  4. The Golden Rule of Investing
  5. Avoid Psychological Traps to Have Successful Investing
  6. Changes in Stock Values Can Be Big Numbers
  7. How to Invest Smart
  8. Stock Advice - Important Selling Rules
  9. Poor Stock Buying Decisions
  10. Market Indicators
  11. Stock Market Cycles
  12. When a bear stock market may not be a bear market
  13. Stock Index Futures
  14. Four Things that Affect Stock Valuation
  15. What is a P/E ratio?
  16. Value Investing
  17. Cheap Stocks
  18. What is a Financial Statement?
  19. Analyzing Financial Statements
  20. Stock Market Tip - Red Flags to Look For When Investing?
  21. The Annual Report How to Read
  22. Stock Market Analysts Stock Market Advice and Tips

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