Investing In Stocks – How To Triple Your Money Once Per Decade

Investing In Stocks – How To Triple Your Money Once Per Decade


Most people who hold onto stocks for long periods of time (decades) make money in the stock market. However, there are strategies that will help you make so much more than the buy-and-hold 10% (before taxes). If you want to make larger returns, you need to learn about the regular cycles of the stock market.

The Bull and the Bear

If you look at the big picture, the stock market has two phases of the cycle — the bull market and the bear market. The bull market climbs slowly for around 3-7 years (the last three bull markets have been 3 years / 1987-1990, 9 years / 1991-2000, and 5 years / 2002-2007).

There have been two bear markets since 2000 in the United States (2000-2002 and 2007-2009). Each bear market lost about 50% of the value of large-cap stocks (the big companies you find on the New York Stock Exchange).

The Key to Profits

The key to making money in stocks is to own stocks as prices rise, then sell before the crash comes and takes your profits. To do this, you have to know what the cycle looks like at the top and the bottom. In order to buy low and sell high, you need to buy when economic conditions are awful and sell when economic conditions are good and you don’t think they can get any better.

The key to the cycle is that the federal government and Federal Reserve Bank pump lots of money into the economy at the bottom of every cycle. It takes years to filter through the U.S. economy, slowing improving economic conditions and causing stock prices to rise. When that money ceases to increase through the system after having increased for several years, the market has a natural correction to remove inflation out of the system. At the same time the stock market will fall or crash.

At the top of the cycle, unemployment is low. Prices for almost everything are rising including food, gas, houses, automobiles. More luxury items are being sold as people feel richer. More people are buying houses and cars. And, of course, the stock market has been rising usually for several years.

At the bottom of the cycle, the market has just had a sharp fall if not a crash. When the stock market has crashed over the past 1-2 years and you are scared to death to buy stocks, that is the right time to buy. People will say you are crazy to buy stocks. Anytime the Dow Jones Industrial Average is down 50%, I’m a buyer of good stocks.

From 2009-2013, 9 of 20 Dow stocks are up more than 3 times. I made 3.5 times my money on over half my retirement account in

If you know how to time the markets with any precision at all and can pick the right stocks, you can triple your money at least once per decade. You could have tripled your money twice from 2000-2013.

I can’t teach you everything you need to know to do it in one short article, but I want you to know it is quite possible.

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