Tradersguruji

  Where are we in the current business cycle? Many people who failed to recognize the state of the business cycle did not get out of the stock market before the Great Recession hit. Making matters worse, they feared to get back into the stock market at the beginning of an expansion cycle. That's the right time to do so. While you can't time the market perfectly, you can improve your returns by getting better at reading the business cycle. You then can adjust your asset allocation to take advantage of the phases. 4 Phases of the Business Cycle The business cycle has four phases. Expansion:  The economy grows a healthy 2% to 3%. Stocks enter a bull market. Peak:  The economy grows by more than 3%. Inflation sends prices up. There are asset bubbles. The stock market is in a state of "irrational exuberance." Talking heads announce that we are in a "new normal." Contraction:  Economic growth slows but isn't negative. Stocks enter a...