{"id":9506,"date":"2014-07-11T14:53:37","date_gmt":"2014-07-11T09:23:37","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=9506"},"modified":"2020-03-03T17:11:43","modified_gmt":"2020-03-03T11:41:43","slug":"benefitting-from-the-bull-and-bear-cycles","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/benefitting-from-the-bull-and-bear-cycles\/","title":{"rendered":"How to benefit from the Bull and Bear Cycles in equity market?"},"content":{"rendered":"

In the last article<\/span><\/a><\/span><\/span>, we told you how you should deal with Risk. In this article we will highlight the importance of the awareness of cycles.<\/span><\/p>\n

If you\u2019ve been an investor long enough, you know by now that the one similarity it has to life is that, there are very few sure things. You can be wrong about the value of the company, your assumptions and estimates, sometimes the circumstances may itself change and sometimes even a sure shot event may not occur. However, as Marks points out, there are two things that will always be true in the world of investing:<\/span><\/p>\n

Rule # 1:<\/strong> Most things will prove to be cyclical<\/span><\/p>\n

Rule #2:<\/strong> Some of the greatest opportunities for gain and loss come when other people forget rule number one<\/span><\/p>\n

Sure, we don\u2019t know what will happen in the future, but we can at least be prepared. Very few things will move in a straight line. The main reason for this cyclicality is the involvement of us humans! Because we humans are emotional and inconsistent. And it is the investor\u2019s reaction to events that determines the degree of cyclicality. While the occurrence of a cycle is subject to many factors, the correction is not necessarily dependent on external factors. Cycles are self-correcting! <\/span><\/p>\n

Here\u2019s how a typical cycle would go:<\/span><\/strong><\/p>\n