The FTSE100 Index from 1984

Here is a long-term chart of the FTSE100 Index since inception:

FTSE100 Mthly

Tell me how you would of INVESTED had you known the following:

  • A bull market was due from 1982 to 2000
  • from 2000 a 18 year bear market was due

The answer is obvious, yet millions got caught out – because they do not know or understand market cycles.

I keep banging on and on about market cycles – that chart highlights how important they are – one market cycle = 581% growth, the other market cycle (not yet fully completed) shows so far a 4% loss after 3/4 of the cycle has elapsed!  WHAT?  No wonder people can’t work out what it going on – they’re not looking back FAR enough to compare like for like.

Just think about someone who is due to retire soon – 14 years of virtual waste in terms of investment growth – this is why it is vital in understanding market cycles and your Investment life

Markets expand and then contract – this is simply what is happening here, albeit on a horrendous scale – stop and think what the next expansion and contraction will be like!  and yes there will be another 1987 style plunge, which in the Dow is likely to be thousands of points not 500 or so.

Economists and fundamentalists will tell you this and that, my pension isn’t paid in this and that’s, its paid from the growth it makes over the years, that is why it is important to understand the markets and where you are in them, because they’ve been wrong for 14 years and counting!

I’ve also made a prediction for Gold too, at some point I’d expect it to reach that level.

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