Introduction
I am 53 years old this year, and I like to be a very educated investor. It does not matter if I win or lose as an investor, I like to demonstrate how I am determined to learn the basics first. I start to read more books, and then I can think independently.
Book review
Here is the article. I like to show my favorite learning here.
When the economy is going crazy, buy sturdy stocks like Procter and Gamble, General Mills, and Colgate. Why? When the economy is going wild, these stocks seem like boring investments because they are steady earners, and during an economic boom, steady earners look very boring compared to the cash that’s elsewhere. So many people abandon the food and toiletry stocks and jump on board the big growers, leaving these great companies often seeing a stock loss for no reason connected to the underlying company. Thus, economic booms are the time to buy steady earners, especially right near the top. When things start to sour, people return to the safety of these steady stocks and their price rebounds – and you can ride that elevator up as the overall market is going down.
When the economy is weak, buy cyclical stocks like tech stocks, retailers, and automotive companies. This is almost the reverse of the logic above. When the economy is down, cyclical stocks start reporting somewhat shaky earnings numbers, people get scared, and they jump back to safety. Thus, this is the moment to buy those cyclicals with a long, strong pedigree. Buy your Toyotas and your Apple Computers when the market is low and their numbers look soft so you can ride the elevator upwards when they inevitably rebound.
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