Investing in Uncertain Period2010 Sep 16
Investing always has some uncertainty, but there are some situations when rise even more questions than usually. The current situation is just like one of those uncertain periods. When the economic cycle so inconclusive, it is difficult to say at which point we are. Especially, when modern economists are trying to be one for the other more creative, makes up not only "U" and "V" cycle forms, but also "W", "L", "M" J "and other forms of script. Only if alphabet would be more diverse, yet such exciting options could come out ...
However, neither the market nor the economy does not like templates, and often draw their own original script. And, of course, markets will rise and fall again and again, it just a matter of waiting and what to do with investments during it. Investment decisions are inevitably dependent on economic cycles, that‘s true. These economic fluctuations tend to be even crucial for investment, if we would only know at which point of the cycle we standing are. Unfortunately, this is unlikely, especially at this time (maybe always), when the expected market movement can turn to any direction.
When some experts forecasts a moderate recovery and the others a second wave of recession, you need to decide what actions could be best for your investments. For sure is only the fact, that if we would believe to all the skeptics from the beginning of the recovery - we could have lost a lot of money. It is not only difficult to precisely predict the further market scenario, but not really practical and feasible. Despite the fact that the economy is facing one or the other problems, but the investment market still looks "after letting off the steam“, and quite rightly valuated what is one of the most important things to prevent a very sharp fall in investment markets, as easily could be after a long period of euphoria.
So what would be the best advice to encourage the growth of investments, or at least to maintain its value? The most important rules to be remembered - diversify while maintaining the appropriate level of risk, particularly including investing instruments from emerging markets, which are becoming a serious counterbalance to the most important traditional economies, and which economic cycles are more independent.
Rokas Lukosius - investing book author
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