Saturday, February 03, 2007

First Law of Motion

Sir Isaac Newton, the man who saw an apple dropped and discovered the gravity of the earth was a 17th century scientist. His first law of motion states that:

"An object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force." Objects "tend to keep on doing what they're doing." In fact, it is the natural tendency of objects to resist changes in their state of motion. This tendency to resist changes in their state of motion is described as inertia.

In applying this law to the stock market, we assume that a trend in motion will continue until it is actually reversed. So keep in mind never to buy in a downtrend. Buy only in an uptrend.