Predicting future with past and present trendsIf we examine the various changes happening in this world in the value of material in the market or business or real estate or precious metals then we will find that there is a trend in them. Sometimes the trend may not be so straight forward and indicating increase or decrease in a particular direction but most of the times we can derive many references and help from these trends. Many decisions in the business environment are taken based on these trends only. They are very useful for predicting the future trends. So far so good but sometimes trends may not repeat in future and our predictions might fail also and this aspect we have to keep in mind while using trend analysis for futuristic plans. In general, trend analysis based on past and present data will help us in planning for our future endeavours and activities to optimise our efforts in a particular task or activity.
let us understand the effectiveness as well as shortcomings of trends and their behaviour with time. The first example is share market. If we see the performance of the share market in a long time frame then we would find that there is a gradual increase in the share price index which tells us that there is a good return in long time investments in this area. But when we observe this in short time then the trend may not be repeated and there are time gaps when the market remains dull and stagnant for quite some time before rising or going down again. So something which is increasing with time in long time frame may not do so in short time. This is an important point to take in cognisance while investing for short term.
Another example is gold which is a valuable metal and most of us buy it for jewellery purpose and sometimes for investment purpose also. Historically on a long time frame it has given a very good return but there was a time a few years back when it remained stagnant for a decade or so. The trend did not replicate during that time. People started to tell that gold has lost its sheen. But now it has again got a rising trend encouraging the investors to buy it.
This is my entry for the month end topic based TOW contest on the topic 'Trend'.