by Edgar Frost

Created on: September 21, 2008   Last Updated: October 08, 2008

There is no way to predict the stock market. I repeat, there is no way to predict the stock market. There, now that I got that out of the way, let's talk about trying to figure out where the stock market is going.

I think I've made it pretty clear that the stock market can't be predicted, and if I haven't, please reread the opening paragraph. With that said, I do believe that in general, you can get a good idea of where the market is heading. This is a lot different than predicting where it is going, because you can't do it with any degree of certainty, and any predictive ability you might gain is more general and market-wide, rather than specific.

The best way to figure out where the market is heading is to begin by educating yourself and doing research. The best place to start is to buy some general books on investing. Even if you consider yourself to be knowledgeable, you would be surprised at how helpful a general text can be in filling holes in your knowledge. The next step is to become a voracious reader. Find one or two finance sites you like and keep reading. Start looking for trends, then study how larger market and idustry trends affect particular stocks. Finally, don't read finance books and articles at the expense of other topics. You need to keep up on political and global news. The value of your assets don't rise and fall in a vacuum. They are affected by a myriad of events.

There is no way to make sure-fire predictions, but following current events and their effect on the financial markets will better prepare you about what to look for. If you don't find this method effective, may I suggest tarot cards, a magic 8 ball, or palm reader.

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