MarketCycle Explained

It took decades for MarketCycle Wealth Management to arrive at its proprietary system of investing.

  • The market cycle is divided into three roughly equal parts based on Federal Reserve (and other Central Bank) activity.  Some assets out-perform when rates are low and stable, some assets out-perform when the Fed is raising interest rates or holding them at high levels, and some assets out-perform during recessionary conditions (as in 2008)
  • We have created proprietary economic-data acceleration techniques that can tell us what the Federal Reserve is going to do even before they know themselves.
  • Assets generally out-perform in only one of the three environments, but not in the others.
  • So, we switch positions every few years to exploit these changing market cycle conditions.
  • With 75% of the diversified portfolio, we utilize low-risk and low-volatility investments, holding for several years at a time.  This allows us the opportunity to beat the market during difficult periods and this translates to beating over longer time-frames.
  • With 25% of the diversified portfolio, we are either very aggressive when risk levels are low… or very protective when risk levels are high.  These alternating holding periods are usually for over one year (reducing taxes).
  • We continually calculate economic recession probabilities 1 and 3 and 6 months out for the United States and globally.
  • When the next inevitable economic recession arrives (as in 2008) we go into protective mode.
  • At under-valued & lower-risk market bottoms, we re-enter the market aggressively.
  • At obvious market tops, we move to reduce risk several months prior to the market falling into recession.
  • We follow secular cycles in assets and currencies and commodities and this affects our portfolio allocations and strategies.  Money is over-allocated to areas likely to out-perform.
  • We continually monitor the relative strength of countries and currencies so that we know which region of the globe contains the most strength.
  • We are experts in all matters regarding the repeating market cycle.
  • We work with clients all across the globe and can trade in multiple currencies.

 

Our goal, simply put, is to make money for our clients in all market conditions.

$10 invested in 1928, and not touched, would have been worth only $17,020 in the year 2000, but $10 invested in 1928, while avoiding the 30 worst bear market months during this period, would have been worth $1,864,400 in the year 2000.

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MarketCycle Wealth Management | Stephen Aust
MarketCycle Wealth Management, LLC is a Registered Investment Advisor. Information presented is for educational purposes only, is not considered an individualized recommendation or personalized investment advice, may not be suitable for everyone and does not intend to make an offer or solicitation for the sale or purchase of any securities. All investments involve risk and unless otherwise stated, are not guaranteed. Past performance or performance charts are not a guarantee of future performance. Portfolio performance charts are shown net of fees so the management fee, brokerage fees, trading fees and ETF fees have already been subtracted. Current performance may be higher or lower than that shown and differing accounts may show different results. Investment returns and principal value in client accounts will fluctuate. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Be sure to consult with a tax professional before implementing any investment strategy.