Investment trend is all about making informed choices to ensure that you’re pursuing opportunities that align with your long-term financial goals. Whether your interests lie in sustainable investments, technology, big pharma, healthcare or real estate, having the right information puts you in a strong position to capitalize on ups and downs, ultimately contributing to your financial well-being.
Investing in trends is based on the idea that, if a stock has generally been rising for some time, it will continue to rise. But the market is complex, and history doesn’t always repeat itself. For example, a company’s profits may have been increasing steadily for years—but the price of its shares hasn’t. This could be a sign that the company’s profitability has plateaued and it’s time to move on.
To identify investment trends, investors draw lines, known as trendlines, that connect price action, showing higher highs and higher lows in an uptrend or lower highs and lower lows in a downtrend. These trends are short-term, ranging from days to weeks and influenced by daily market activity. Intermediate trends, spanning months, offer a more granular view of market sentiment. And long-term trends, which span years, help strategists plan for sustained growth and manage risk.