So far this week…
We’ve hunted for Investing’s Holy Grail.
We were amazed by the Eighth Wonder of the World: Compound Interest.
And we discovered the Secret Number of Finance: 72.
Now in our quest to uncover the secrets and mysteries of investing, we’ll reveal investing’s version of the Golden Ratio.
The Golden Ratio, well known in the fields of science and math, indicates that there’s a symmetry that underlies the universe. In art, it can be seen in the placement of points of interest in art works. Scientists see the Golden Ratio in things as small as the Nautilus Shell, to the immensity of a spiral galaxy.
The Fibonacci sequence is investing’s golden ratio.
The Fibonacci sequence, named after Leonardo of Pisa, who was known as Fibonacci, starts with 0 and 1, and the remaining number is the sum of the previous two. 1+2=3, 2+3=5, 3+5=8, 5+8=13… and so on.
What does this have to do with investing?