Supply & Demand
The Law of Supply and Demand is universally recognized in academia and the business world as the foundation, the starting point of all economic analysis. This Law states that when demand for a freely traded item exceeds supply of that item, its price will rise. Inversely, if the supply of an item exceeds demand for it, its price will fall. Since stocks, bonds, currencies, and commodities are freely traded, their price movements are dictated by the Law of Supply and Demand; The Law is therefore our starting point in their analysis.
At Lifelong Wealth Strategies, the Law of Supply and Demand is at the core of our investment process. We employ studies that measure the daily price movement of common stocks, and the stock market itself. We also do it for bonds, currencies and commodities. These daily price movements reveal over time, the composite action of investors and their psychology as it pertains to economic cycles and their expectations for the future. The price of common stocks and bonds move in relatively well-defined trends, commonly known as Bull and Bear markets. Gradual changes in both buying enthusiasm and in the desire to sell provide a series of progressive warning signs; signs that can help investors anticipate important changes in trend. The anticipation of trend changes allows us to transition into a more aggressive strategy near the beginning of a Bull market, and transition into a more defensive strategy near the start of a Bear market. Therefore, it is difficult to categorize our strategy as being conservative, moderate or aggressive because it will be all three, but at different times depending on shifting trend changes within Bull and Bear markets.