Tuesday, 5 June 2012

Focus on Investing in Growth Companies for the Long Term

Since the early 1940s, when World War II brought the Depression to an end, there has never been a long-term catastrophe in the stock market.  Even in the worst of times, good companies continue to earn, and many stocks buck the trend.  To be sure, some of the weaker companies with poor management fold, but the well-managed, strong companies quickly scoop up their market share and life goes on.

Focus on investing in growth companies for the long term and , if the time arises when you need to take cash out of your account, sell off portions of your losers - the ones whose sales and profit growth is sluggish, not necessarily the ones whose prices are down.

This will assure you that when the market comes back up, which it surely will, you'll have a portfolio of winners.  Have faith that the companies you own a piece of will perform well in the long term and so, therefore, will your investments.  (And gloat as you continue to rack up 15-percent years while your contemporaries are pulling down 6 percent and paying the taxes on it every month.)

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