Saturday, November 15, 2008

The logic of economy that will never change.

Just want to post something that will help people in investment or stay off from losing. Here my rule:
1) There is no one instrument that will be profitable all the time , even for investment in gold, crude oil, stocks, property, forex and setting up business.
2) Never invest in thing you are unsure of.
3) Try to be a neutral party in people comments, so that you can analyse the thing from the critic and the pro.

Some logic that I found always working in free market.
1) When the economy is bullish, the sign stock market index jump by 50-100% in a year. The gold price will sure hit bottom and will be the best time to buy it. Property price, oil price and finance stocks will hit new high and must be stay away from. Save all the money you have in bank, don't care what interest they gave you as in the latter part you can earn more with this money. Wait for it to turn bullish and you can start investing in property and stock when they hit bottom. Also remember to sell all you gold investment that you bought during bullish time to get your gains.

The sign of them hitting bottom, index and retrenchment rate start to fluctuate back and forth at an average horizontally. Normally I will gauge using major stock index as it is more up to date and instantly available.

2) Money will always drop when central start to combat lower interest rate, and country is in deficit. This lower investor interest in that currency when more money is print to increase liquidity but will devalue it.

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