Mastering the Market Cycle: Getting the Odds on Your Side

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The wisest investors learn to appreciate these rhythms and identify the best opportunities to take actions which will transform their finances for the better. Corporate management is not immune to the swings from risk-averse to risk-tolerant either (see the financial crisis). Well, he’s someone whose job is to invest in a range of assets, comprising a package known as a portfolio, which he hopes will increase in value as the years pass.

Instead of scrolling through your social media news feed, this is a much better way to spend your spare time in my opinion.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.

Economies, companies and markets operate in accordance with patterns which are influenced by naturally occurring events combined with human psychology and behaviour. For instance, economic data is twisted in a positive or negative light depending on the prevailing emotion.

As far as I was concerned, there wasn't enough discussion about central banks and the way they have refused to let cycles take their natural course in recent years. The greatest lessons regarding cycles are learned through experience…as in the adage ‘experience is what you got when you didn’t get what you wanted. In making investments, it has become my habit to worry less about the economic future—which I’m sure I can’t know much about—than I do about the supply/demand picture relating to capital. In other words, while superior investors — like everyone else — don’t know exactly what the future holds, they do have an above-average understanding of future tendencies.

If you’re uncertain as to whether there will be a correction in the market – or if you think there’s no reason to worry because ‘it’s different this time’ – you have to read this book before you make a move. Factors include: population growth which impacts hours worked and GDP growth which is affected by demographic shifts, education, technology/innovation, automation, and globalization. But rather the investor who bought the property from the bank amid distress and then rode the up-cycle. Performing that trick requires a strong stomach for being wrong because we are all going to be wrong more often then we expect.Lenders move from a cautious, risk-averse position unwilling to lend without higher rates and protection from losses to a risk-tolerant, willingness to lend at lower rates and no protection in place out of fear of missing out. There are three ingredients for success—aggressiveness, timing and skill—and if you have enough aggressiveness at the right time, you don’t need that much skill. The author’s polished, precise English and long experience combine to leave you in no doubt about the message; cycles matter and woe unto you if you don’t take them seriously. The study of cycles is really about how to position your portfolio for the possible outcomes that lie ahead. Despite being one of the most accomplished investors of our age, Marks has risen above the ranks by following seemingly simple rules, detailed in this book with his usual proficiency, unique insight and, eminently, in plain English.

Mastering the Market Cycles’ is an absorbing, authoritative investment book from a highly respected investor. Mastering the Market Cycle (2018) tackles a subject that’s often misunderstood, ignored or both: financial cycles.Extremes are not guaranteed for every swing, but cycles that reach extremes in one direction are often followed by an opposite extreme in the other direction. Doing this will, obviously enough, increase the chances that your portfolio will gain value in the future. You can change your choices at any time by visiting Cookie preferences, as described in the Cookie notice.