1. Stock market prediction is an arcane art mixed
with the best of computer discipline. With the
recent performance of the stock market and
economy, it is an idea we all need to take
seriously. The papers, radio and TV all discuss
how our personal 401ks have seen better days.
While things have improved some recently,
many 401ks have been hit very hard. Credit
card balances have jumped and foreclosures
have climbed. Economists often accept that the
economy has a large influence on the stock
market price. Short term the market may be
able to shake it off but in the long run financial
performance and cash will win out. Balance can
take a while to re-establish itself though. Just
understand as you listen to the pundits
bestowing their latest stock market predictions
that they don't have a view into the future.
Had you known what was going to happen in
2000, you would have avoided a large decrease
in your 401ks. They are really just using
3. Their prediction is based on experiences, a model and sometimes just a gut
feeling Knowing what their stock market prediction is based on can help you
understand if it is going to be useful for you No one truly believes you can
predict the future those experienced in the trading pits can make very
educated guesses though They use tools like technical analysis based on the
past price movements and trading volume to determine the probability of the
market moving in one direction
4. Being able to look at technical analysis can give you an edge in the market
Even a small percentage over the long run can add thousands to your
retirement income People will often talk about bubbles and picking the top or
bottom of one Just remeber one very important fact Bubbles always tend to
last longer than people expect silver stocks they will
5. Trying to guess the end of a bubble can be dangerous Now one really knows
if silver or oil will continue its price increase Or if the economy will enter into a
decent recovery or a double dip recession Building a model allows us to get a
decent idea of where things are likely to head though Developing those
models can be very difficult
6. They will often function very well for a short period of time and then
deteriorate swiftly Many times that is enough to give you a decent edge
Commodities aren't the only thing in question Many commodities have a
direct influence in the stock market
7. Gold price can have a huge impact on a gold mining company's ability to
make a profit Those profits tend to dictate the share price of a stock If you
can generate increasing and steady profits, investors generally reward you
with higher stock prices Make sure you study the model and understand what
it is built upon
8. Make sense of their model before believing their conclusions Stock market
prediction can give you a distinct advantage in the market IF you find the right
one Pick the wrong one and you could be living in the paupers section of town
