A few weeks ago sent me an article on my website on debt reduction that generated an interesting conversation. It's a fairly standard article on what I thought was a commonly accepted principle. Here's the scenario:
Are you aware of the fact that the peak of the global oil production (all liquids, including unconventional oil) will peak in the next few years. Do you know China is the largest producer of coal? Coal production n China would peak somewhere around 2010-2020.
You must be thinking what to do every available source of energy seems to be peaking in the near future? The global peak of uranium production lies somewhere around2025-2050. The global peak of natural gas production lies somewhere around 2025!
Almost everyone who has money in the stock market has lost money in the last year and a half. This makes it difficult to get any confidence back and have any faith that the market will go up again. Having it go down so far and so fast has probably unnerved quite a few investors.
At times like these it is hard to buy back into the market because of fear but we all know that at some point we need to get back in. Choosing that reentry point is what will ultimately separate the winners from the losers. The people who have the nerve to get back in when prices are low are the ones that will ultimately come out winners.
Follow the Hot Stocks
Robert Cialdini tells us all about the human condition known as the “social spoof” in his book Influence: The Psychology of Persuasion. Human have evolved far enough that we should know better than to run with the herd or blindly follow like little lemmings, but the instinct is to find safety in the numbers.
There are those that might think that we’ve outgrown such an instinct, that we are far removed from having the mentality of sheep, that such things are merely the stuff of fairy tales; but it is something that humans have been doing for a very long time, case in point the dot com boom. There were millions that were fearful of standing out and being different; the result was a fired up mania fueled by their fears. There are many facets of life where conformity is the key to success, but following the stock market is not one of them. Warren Buffet put it well when he said that if you want cheery consensus in the stock market you’ll pay a high price for it.
You may be able to predict the movements with some well-informed guessing, but the more important question is whether your investment strategy is strong enough to profit regardless of the market moving upwards or downwards?
You may think that it?s impossible to turn a profit when the market has taken a downturn, but you are incorrect. With the right knowledge and know-how you can find a number of ways to increase you return no matter how the market fluctuates.