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Savvy Investors understand the fundamental investing principle of “ Buy Low,Sell High”. This advice holds true no matter what the investment is. Here is a graph showing the cycle of investments. It shows the points of maximum risk and maximum opportunity when purchasing. Conventional Investing wisdom dictates that we buy low (point of maximum opportunity) and sell high (point of maximum risk).

Investment Market Cycles

Investment Market Cycles

The challenge investors face is to determine when the market has bottomed out. For most of us, hind site is the only purveyor of this wisdom. Odds are however, in your favor when the market cycle has reached a position along the Point of Maximum Financial Opportunity (the Low).  You are most likely to profit by purchasing investments at this point and selling them at or near the Point of Maximum Financial Risk (the high).

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