Over the past fifty years in the United States, there were twenty-one episodes of 10% or greater share market falls, but only 7 saw recessions and bear markets.
"The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital. Not only is the mere drop in stock prices, not a risk, but it is an opportunity." Li Lu. The risk is most often portrayed as market volatility when in reality it's actually the whole lot more: the potential risk of capital loss; the risk of not having ample investment income; the potential risk of not having a sufficient amount to last through retirement age.
The essential information revolution already has provided us with the ability to access a good amount of information and opinion concerning investment markets.
"I am going to reveal the grand secret to getting rich by investing. It's a simple formula that has worked for Warren Buffett, Carl Icahn and the greatest investment gurus over the years. Ready? Buy low, sell high." Larry Kudlow.
They be obvious: the less you will pay for the investment the more effective the return potential; just having a couple of shares leaves you very exposed should the news turn bad concerning all those shares however if you diversify over a range of shares you'll be able to lessen the risk of a fall in your overall portfolio; and doing the opposite towards the crowd means you'll be able to avoid the points of optimal risk in markets when commonly fully invested and have benefited from periods of maximum opportunity when most have sold.
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