This is why you need to understand cycles, booms, and busts
Sep 15, 2019
Although great attempts have been made to smooth out the business cycle, the cycles always prevail.
Indeed, cycles are forever prevalent, and not only in markets: there are four seasons, we have our own life cycle…even planets have a life cycle.
And for investors, it’s vital to remember that an understanding of market cycles is the key to maximising returns.
Market cycles work through the accumulation, mark-up, distribution, and mark-down phases…and are mirrored by the emotions of investors.
Value investors and smart money managers look to load up on discounted assets in the accumulation phase, when sentiment and media reporting is at its lowest ebb – in effect, looking to buy a dollar for fifty cents – in accordance with capital growth theory.
Of course, the real world is messy, and you can never pick the exact bottom of the market.
But the nice thing is, you don’t need to invest your money all in one go, and you’ll get near enough the bottom to generate outperforming returns.
So, remember, the smart money is contrarian, and buys during the accumulation phase, rather than at the climax of the buying cycle.
Markets and economies will continue to cycle, as I discussed further in the short video here
Whenever you’re ready… here are 4 ways we can help you manage your own money and go next level wealth:
- Boom or Bust in 2021 – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan for 2021 - book in here
- Subscribe to our Top 100 Podcast for Investors
Listen in to our new podcast - The Low Rates High Returns Show - Apple , Spotify , SoundCloud
- Join our Implementation Program
We’re putting together a new coaching case study group this month for private investors. If you’d like to get the plan, tools and timeless principles for managing your money and creating next level wealth … just send an email to [email protected] with the word “Case Study” and we'll get you more details.
- Work with me privately
If you’d like to work directly with me and Stephen Moriarty directly to help you map out and action your next level wealth plan… just send an email to [email protected] with the word “private”… tell me a little about your situation and what you’d like help with, and we’ll get you all the details!
