To be a good investor you should have as much information as possible which is why it's my belief that to have a wide range of knowledge, across a broad range of angles will show interviewers, employers and colleagues that you have the skills needed to make a great investor.

The Stock Market really isn't just about numbers and following trends, rather you have to be able to predict them with accurate and well thought through reasoning. Simon Thompson explains one such example in Trading Secrets - 20 hard and fast rules to help you beat the stock market:

Every bull (rising) market that started in the second year of the decade has not been able to run past the seventh year of that decade. The reason lies with the US Presidential Cycle. The US bull markets that started in October 2002, August 1982, June 1962, April 1942 and July 1932 all have one thing in common: They commenced between three and eight months before the start of pre-election year. 

In order to increase their chances of getting re-elected, Presidents of the White House inevitably give a monetary and fiscal stimulus which investors react favourably to. As a result the five bull markets that began in the second year of the decade also got a helpful boost from the Government.

There are three cycles investors are normally aware of: Peak-to-trough stock market cycle, the economic cycle and the four-year US presidential cycle. When these converge, it means that the bull markets beginning in the second year of decade are likely to be very long runners. Indeed 1942, 1962 and 2002 were three of the four longest bull markets in history. Yet if they're still running after the seventh year of the decade, beware because the cycles will now be out of sync and odds are heavily stacked that it'll turn bearish (downwards). In other words, a market 'correction' will be needed.

It's these outside factors which determine market prices, and so become aware of them. Another example would be at the beginning of this year's summer (late June 2009) B&Q saw a sharp rise in share prices due to increased revenue from customers purchasing outdoor furniture thanks to the heatwave.

 


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