Every asset class moves through economic cycles. Recognizing these phases can dramatically improve capital allocation decisions.
Growth accelerates. Employment rises. Asset prices climb. Liquidity is abundant.
Valuations stretch. Risk increases. Speculation intensifies. Smart capital becomes cautious.
Contraction occurs. Weak assets fail. Over-leveraged positions unwind. Opportunity quietly begins forming.
Capital re-enters strong assets. Strategic buyers deploy aggressively. New cycles begin.
Understanding cycles allows investors to deploy capital strategically rather than emotionally.