Tagged: Cycle Phase
June 6, 2014 at 12:56 pm #12509
I recently found the site and have been very impressed and have always agreed that business cycle allocation was the best way to safely outperform! I was hoping you could give a little further clarification on why you feel we are still in the early/recovery phase vs. further down the mid/growth phase?
I have done a lot of looking and the consensus of the “genius analysts” indicates we are well into the mid/growth phase and most likely past the half way point of it. I have tended to agree since a) it has been 5 years since we exited the recession, b) large caps have been moving stronger than small caps as of late, and mid cycle sectors are outperforming early cycle sectors c) I can’t imagine some indicators (such as unemployment) improving much more before it plateaus. They can only go so low.
I know the length of the recovery should not play into it and we look at the data they stand. Some data seem to suggest both an very very healthy improving economy, while others seem to suggest a more steady mature economy.
Can you please provide more insight into your position?
Thank you, AaronJune 8, 2014 at 6:18 pm #12559
That is such a great question that I will address it in the monthly update which I should hopefully get up by tomorrow.
The short answer is that I do believe we are still in the early/recovery phase. But this recovery is certainly different because of the Fed’s aggressiveness, so the business cycle phase may not always match up exactly as we would expect with the stock market.
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