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Are investment markets starting the cycle again?

Slowly but surely the UK stock market, and the US stock market, are showing signs of life amid signs that many investors believe the worst of the economic downturn is over. However, historically markets have a very set cycle which with hindsight is very easy to read and very easy to understand. So are markets starting the economic cycle all over again?

The cycle of a traditional stock market starts with optimism which is followed by excitement and peaks at euphoria. After the euphoria, when some investors may take profits and believe the market has peaked, comes a move towards anxiety, denial (the market will turn?), fear, panic and bottoming out at despondency and depression. After a phase of consolidation we then see hope (are we there at the moment?) which is followed by relief that the worst is over and optimism for the future. As complicated as investment markets are there are predefined investment cycles with some lasting longer than others - some will peak at higher levels and some will bottom out at lower levels.

The truth is that investors around the world have short memories and in only a few short years the vast majority will have forgotten about the tough times we have just gone through. If you are looking to invest your money into the stock market it is essential that you take professional advice to ensure you are taking the right course of action for your situation and your investment strategy.

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