Investment markets -- either in equity or debt -- experience cycles of expansion and contraction. Simply put, investments increase in value, maintain their value or decline depending on economic cycles and investor sentiment.
Economic Cycles and Their Phases
A typical economic cycle has four main phases:
- Expansion: The economy is growing, and investments generally increase in value.
- Peak: Economic growth reaches its highest point.
- Contraction: The economy starts to decline, often leading to a recession.
- Trough: Markets hit their lowest point before beginning to recover.
Despite these fluctuations and periods of economic downturn, stock markets have historically risen over the long term. This growth is driven by factors such as technological advancements, productivity gains, and the overall expansion of the economy.
The Benefits of a Long-Term Investment Strategy
While timing the market is nearly impossible, a long-term strategy allows you to purchase equities that will appreciate over time. This approach helps you benefit from the general upward trend of the market, despite short-term volatility.
How The Morson Carson Wealth Counsel Can Help
Morson Carson Wealth Counsel offer expert advice to guide you through these market fluctuations.
Our team is part of a national network of market analysts who closely monitor stock market trends.
We continually search for emerging trends and opportunities, both on the upside and downside, to help you make informed investment decisions.
However, nothing beats the power of long-term, consistent investing in quality companies. Over time, these investments tend to be consistent market winners.