Cycles
The business cycle reflects the aggregate fluctuations of economic activity, which can be a critical determinant of asset performance over the intermediate term. Referring to trends and patterns that emerge during different markets or business environments, market cycles are the period between the two latest highs or lows of a common benchmark, such as the S&P 500, highlighting a fund’s performance through both an up and a down market. Markets move in four phases; understanding how each phase works and how to benefit is the difference between floundering and flourishing, these phases include accumulation phase, mark-up phase, mark-down phase, and distribution phase.
- Cycles are natural and all around un
- Unfortunately cycles need to have "bad times" in order to enjoy "good times"
- Must have deflation & inflation, rising unemployment & falling unemployment, etc.
- The best cycle researchers/experts use a hierarchy of cycles that overlap to forecast a larger trend
- Why are cycles unpopular?
- People may not like the idea that cycles require downturns (They prefer everything just going up
Some Famous Cycles
- 30 Year Commodity Cycle with peaks in:
- 1920
- 19149-51
- 1980
- 2008-2011
- 2038-2040 (expected)
- 500 Year Innovation Cycle
- 1150 Commercial Revolution
- 1648 Capitalist Revolution
- 2100s Peak Information Revolution (Started in 1900)
- Generation Cycles
- Every 40 years there is a new generation
- Innovation Cycles (45 years)
- 100 Year Globalization Cycle
- Big peaks in 1912 and 2008-12
- Sunspot Cycles