How we forget - the stock market cycle will go on

I've been reading about the US stock market crash of 1929 in John Kenneth Galbraith's "The Great Crash 1929", and it is remarkable how many of the phrases used in the book (written in the 1950s) have been heard over the last couple of years when talking about our own stock market fall.

And we read on the BBC website a headline that says: "Bank crisis lessons 'not learned' ".

It seems the lessons are never learned.

In keeping with pace of modern life, we are quicker to forget than we ever used to be. In the arena of finance and the stock market, people are always looking to make money, and an over-regulated system prevents that from happening. Therefore, whatever regulations are put in place following a crash, they will eventually be eroded so that money can be made again.

The facts are these:
- You can never get rid of 'boom and bust'.
- What goes up can come down.
- The fall will always be faster than the rise.
- Long term, and in general (i.e. not every specific stock) values WILL go up.

If you invest in the stock market - or property - you need to go in with your eyes open. We've seen it go down, and we're seeing it go back up again.

The cycle will continue.

Note: No part of this article constitutes financial advice.