Mastering the Market Cycle: Getting the Odds on Your Side

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In investing, success teaches people that making money is easy, and that they don’t have to worry about risk—two particularly dangerous lessons.

But the force behind regression continues to exert itself, the momentum pushes the cycle past the midpoint to the next high or low. More than anything else, clients want to know how to position themselves within the current market cycle, where they stand within it and how it will play out.The wisest investors learn to appreciate these rhythms and identify the best opportunities to take actions which will transform their finances for the better. In investing, there is nothing that always works, since the environment is always changing, and investors’ efforts to respond to the environment cause it to change further.

A simple metaphor relating to real estate helped me to understand this phenomenon: What’s an empty building worth? For starters, it’s pretty much impossible to predict the distant future with greater accuracy than other investors. One of the best books I’ve read on investing and the mindset needed to be successful in the process. We all love to imagine ourselves to be independent-minded and maybe a little bit contrarian but truth is, with a few rare exceptions, almost everyone is guilty of joining in with all the other bulls and bears.Doing this will, obviously enough, increase the chances that your portfolio will gain value in the future.