When I want to go somewhere, before I lace my boots up and take off, I look up directions on a map. By map, I mean GPS. I get directions from the GPS on my smartphone. Traveling somewhere is more efficient with directions. When attempting to navigate the ever-changing terrain of business markets, a GPS is available, if you understand how to use it.
Market trends can indicate the direction in which a market is changing, indicating the most profitable path for investment. Watching market trends is popular for investors, whether you are investing money or investing in a business. Market trends will help to indicate the profitability of entering a market.
For those already in a market, trends can tell you in which direction the market is heading. Just have a look at what the gambling market is doing and what some of the top websites are accomplishing by knowing the trends in their market. This information can provide an advantage over competitors. Understanding market trends can give you a legal advantage over other businesses in the same market. Not understanding them can leave you lagging in a market.
Imagine if you invested all of your money into a business that sold mp3 players, just before the release of the iPhone. That money might have been wasted. Thus it is critical to understand market trends and how the market works. An analysis of the trends may have forewarned you that your investment was unwise.
Examples Of Market Trends
In my lifetime I have used cassette tapes, CD-ROMs, Mp3 players, and my iPhone. The way music is distributed has changed throughout my short (that’s a matter of opinion) lifetime. I have used chat rooms, Myspace, Facebook, Instagram, Twitter, and other internet platforms.
The way people interact with each other has changed drastically throughout my short (that’s a fact) lifetime. These represent trends in the market. Do you remember VHS videotapes? VHS videotapes were big rectangles that stored movies. If you were going to miss a show, it could be recorded on a VHS videotape to be watched later.
Everyone and their Grandmother had a VHS player accompanying their big square box TV. On Saturday night for many families, something special happened. Families or friends would gather in the living room and someone was sent to Blockbuster video.
Blockbuster video was a place that rented movies on their VHS video. Microwave popcorn and overpriced snacks were purchased at Blockbuster video, and living rooms were transformed into movie theatres. Blockbuster video store and their knockoffs could be found everywhere.
In 2004 Blockbuster video had 60,000 employees in 9000 stores with a $5.9 Billion revenue. Blockbuster video was doing extremely well. One day a company called Netflix met with the executives at Blockbuster video and pitched a revolutionary idea to them. The executives at Blockbuster laughed Netflix away and declined their pitch.
Today there are only two Blockbuster video locations left out of those 9000 locations, while everyone uses Netflix on their flat-screen TVs. Blockbuster video will forever be remembered as a company that ignored market trends. Their demise is a continual reminder of what happens when you ignore market trends.
Educate Yourself On Market Trends
Changes and indications should not be ignored. Furthermore, there are serious consequences to ignoring market trends. So many have benefited so much because they understood the direction in which the market was going. I recommend that you stop what you are doing now and learn about market trends.
Although the repercussions of ignoring market trends are severe, the benefits of understanding them are plentiful. When you invest, you do so blindly. It is impossible to predict the risk. But understanding market trends at least, gives you a stick, to feel your surroundings. Understanding Market trends is a bit like having a map of a constantly changing terrain.
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