If you know the cycle you’re in, you can make more effective decisions. You can anticipate instead of react. I’ve been trying to get a handle on the economy to know what to expect and to figure out what the best moves are. The New Economy Cycle is apparently one of the most important financial planning cycles for your life, your investments, and your business. It’s less about the day to day decisions, and more about the big structural decisions you make in your life, such as where to live, what jobs to do, what to learn in school, … etc.

Editor’s note: This is a guest post from Stephen L. Nelson on his top 5 small business formulas.  Stephen is the best-selling author of QuickBooks for Dummies (over 400,000 copies sold), of Quicken for Dummies (over 1,000,000 copies sold), and numerous other books about small business accounting, finance, project management, and technology.  He was once called the Louis L’Amour of computer books by the Wall Street Journal because he’s written more computer books (roughly 160 at last count) than any other author.  What I like about Stephen’s insight is …

How much profit do you really need to make?  You only have so much energy and time.  While the idea of making as much profit as possible sounds great, the reality is life’s full of trade-offs.  In the world of business, you need to know your minimum profitability to meet your objectives.  This helps you identify realistic goals and make more effective trade-offs.  In The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, Peter Drucker, writes about identifying minimum profitability.
Key Take AwaysHere’s my key …

You can lose more money when stocks go down than you can make when they go up. In It’s Never Too Late to Get Rich: The Nine Secrets to Building a Nest Egg at Any Age, Jim Jorgenson and Rich Jorgenson write about the downside of a buy-and-hold approach using an example.
A Comparison of Buy-and-Hold and Trend Investing
Jim and Rich write the following:
“An investor who invested a dollar sixty years ago and stayed in the market at all times could have a portfolio worth about $17,000 today. But if he …