Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
Story Views
Now:
Last hour:
Last 24 hours:
Total:

The Panic Investing Cycle – How to Make Money in the Stock Market

% of readers think this story is Fact. Add your two cents.


 

The Panic Investment Cycle
We have often repeated some basic principles of investing, including advising readers to recognize that every stock varies in price more as a result of emotion and other factors, than as a result of the company’s real business activities. The most important factor in buying or selling a security, is the timing. If you buy when the price is cheap, you will make money. If you buy when the price is high, the next fall in price will hurt you.

If you buy when the stock is priced low, and sell when exuberance is at its height, you look like a very savvy investor. All it takes is patience.

There is now a new name for this phenomenon. It is now called “The Panic Investment Cycle”. It details how the same security will vary in price dramatically due to emotions having little to do with the underlying value of the stock itself.

Doug Fabian, editor of the Successful Investing and High Monthly Income newsletters, describes this cycle as follows:

The panic investment cycle is a migration in emotion from optimism to excitement, then thrill, and then virtual euphoria about how well things are going. Unfortunately, in the absence of the proper risk management tools, this emotion usually morphs into anxiety once an investment begins to break down. That anxiety then becomes denial, and it is at this point that the fear factor invades. Soon after the fear comes the panic selling, and it is at this capitulation point, when nearly everyone is despondent, that the real opportunity for income investors presents itself.”

The Stock Market Cycle
We have always advised our readers to invest in this manner, as it is an easy way to make excellent returns on your investments, cycles, but we are happy to agree with this new name, for a very old adage. Something like The Black Swan event, which description became popular some years ago, and it also described a re-occurring event that has been a truism for as long as investing has been around.

Buy Low, Sell High
You often hear this truism, and yet people miss opportunity after opportunity to follow this basic and simple way to invest. People are always jealous of others who have either bought at an opportune moment, or sold at an opportune moment. Yet investors fail to follow this very simple and basic rule of investing.

Why don’t people buy low and sell high – because people have a basic instinct to follow the crowd. When there is fear in the land, history is ignored and fear takes over.

Fear that the debt crisis in Europe will destroy the economy. Yet the restaurants, hotels, trains and planes in Europe are packed – in the prosperous north at any rate. Northern Europe is a modern, vibrant economy that ebbs and flows as does every prosperous economy.

Fear that the fiscal cliff in the USA will destroy the economy. Let me give you a simple truth. No stupid and self serving politician is able to destroy the US economic powerhouse in so simple a fashion. There could be a bump, and a serious bump, in the economy. But retail sales are booming. Black Friday is projected to provide record sales. House sales are at the highest level in 4 years. Auto sales are setting records, and much more. There is suffering, but the economy will continue.

Fear that China is slowing down. A friend just returned from China. There are people crowding the restaurants and shopping areas. A new middle class has been created and it wants goods and services. Car sales are booming. Demand for high end goods has never been higher. Will there be bumps in the economy – for sure there will, just as there are bumps in every economy. As Baron Rothschild said centuries ago – “Buy When There is Blood in the Streets”.

Fear that Japan will collapse under the weight of its enormous debt. Could be. Maybe they won’t be able to continue their profligate borrowing. But this is a society that until this year was second only to the US in economic production. It may flounder somewhat, but it won’t disappear. The millions of middle class consumers will still exist. The massive car production will still exist.

Fear that war will erupt in the Middle East. Let me remind the reader, that the Great Depression was ended by borrowing and using that borrowing to dramatically increase production facilities. Heaven forbid that we have a war, but if we do, it will be good for the economy.

How to Make Money in this Tidal Wave of Fear
Ignore the experts. Ignore the media. Remember the truism that has stood the test of time over hundreds of years. Buy Low, Sell High.

Stocks are depressed currently. They are at low points. Multiples of p/e are low. Companies are increasing cash reserves rather than investing. This is when stocks are low. Buy now. Sell when the frenzy of the next cycle hits its height.

The bargains that are available now, come around once in a decade. If you miss this opportunity, the next one wont come for many years.

Buy good value stocks, with good management, with no debt, and with valuable unrecognized assets. Then sit back and wait. Wait patiently.

The views expressed in this blog are opinions only and are not investment advice. Persons investing should seek the advice of a licensed professional to guide them and should not rely on the opinions expressed herein. This blog is not a solicitation for investment and we do not accept unsolicited investment funds.



Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.