History serves as a great teacher and any wise entrepreneur will look back over the past 100 years and see that there is a definite trend. There is a cycle or market fluctuation, which seems to repeat every seven to ten years. During these cycles, there are periods of easy prosperity, followed by periods of challenge, where prosperity is more difficult and opportunities are scarcer. Look back over the past 100 years and even beyond and you will most certainly see a cyclical trend, with alternating bear and bull markets.
We as humans are a resilient species and as always we will survive the challenge we are now facing and when we look back on this current down cycle in a few years’ time. We will see that it was just a temporary downward correction, which soon moved back into another positive cycle. You have two choices right now, you can wallow in self-pity and cause yourself undue stress, where you dwell on doom and gloom or you can choose to see these challenges for what they are, Temporary. When you see them as temporary and you begin to understand how to actually use these cycles to your advantage, you will learn to welcome the next downturn, as it will allow you to make a significant profit.
Let me try to explain how to welcome each downturn in the economy and to profit from it. We live in a cyclical environment, where it is impossible to experience an expanding positive economy indefinitely. There are periodical market corrections or negative cycles, where positive economic growth is halted for a period, followed by periods of positive economic prosperity. These cycles are just the natural way of the world. We live on a planet, which goes through four seasons every year. The economy is no different. It also goes through four seasons of rebirth, growth, decline and decay. This process is not unique to the seasons every year or the economy, it is repeated everywhere on our planet.
Despite the governments around the world attempting to smooth out these fluctuations, using monetary and fiscal policy, to reduce the massive swings, which occur, natural forces always come into play and we eventually enter periods of negative economic growth. We can never control these cycles, but we can change the way we choose to respond to them.
Choice one: Wallow in self-pity, disempower yourself and live a very stressful existence, every time there is a downturn.
Choice two: Anticipate the inevitable downturns, work to exploit the benefits, which each downturn offers and grow your wealth.
Making choice number two seems like a no-brainer to me. Learn to understand and anticipate each cycle and you will actually look forward to each down cycle as it will be an opportunity to profit. The mistake we all make is to overspend during the periods of economic growth. We live in euphoria, expecting this feast to continue forever. We consume excessively and live way above our means; banks help us to do this, by extending credit we cannot afford. This puts us in a very weak position when the tough times do come, as we have no resources to call upon. We are instead over extended and unable to weather the storm.
During the easy, spring and summer times of easy abundance, it is not time to be spending and consuming, as is the general trend amongst all humans. It is the time to be saving investing. When everyone is looking to buy and consume, the wise entrepreneur is saving resources, selling his properties at inflated prices and preparing for the inevitable autumn and winter that is going to follow.
When the inevitable downturn does arrive, the wise entrepreneur has accumulated resources, which he/she wisely put away during the euphoric economic growth phase, when everyone was consuming. As prices drop during the economic downturn and everyone panics and wants to sell their properties, businesses etc. The wise entrepreneur has accumulated sufficient resources to buy everything at a huge discount. As this cycle repeats, they once again sell at a huge profit during the euphoric summer cycle, continually growing their resources. When you understand the cycle of life and you are able to use it as a powerful business tool. You will be able to make significant profits, during each down cycle.
Taking on a doom and gloom attitude and only seeing challenges and no opportunity is as effective as cursing the sun, wind and rain for everything in your life, when that is all you have. Learn to use the natural cycles to your advantage and your world opens up. Keep working against the natural cycles and you will remain a victim, rather than a victor.
Author: Andrew Horton Motivational Speakers
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