Friday, August 1, 2008

How to invest for the long term in the stock markets ?

The stock market is always cyclical. It will never be idle for some. Because markets are there because of demand and supply and this demand and supply is due to perception of the market by different people with different views.


Since the supply and demand is created by the emotions of the investors, it never going to idle. It will move up or move down constantly. These movements can be seen in long term, medium term and short term. Long term can be considered as a period above 1 year. Medium term can be considered as 6 months to 12 months. Short term can be considered from 1 month to 6 months.


Since stock markets are cyclical, the ups and downs are seen in all time frames. A long term investor has to hold his investments for more than one year. Some think long term investments are investments which you should not sell, even if you see good profits.

But term investments should be made when the markets are low and long term investments should be sold when it is high. No need to hold it continuously without booking profit.

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