How To Invest Based on Cycles
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Welcome to Money for the Rest of Us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it. I'm your host, David Stein. Today is episode 397. It's titled, How to Invest Based on Cycles.

If that topic sounds familiar to you, it's because this week is a special episode. We edited and remastered the audio for two complimentary podcast episodes on investing using market cycles. In our editing, we focused on curating timeless principles so the content is evergreen and more helpful to you. We took out things that were related specifically to the market at that time.

The two episodes are episode 173, Should You Invest Based on Cycles? It was released September 2017. And episode 224, Mastering the Market Cycle. That episode was released October 2018. I hope you enjoy this remastered and refreshed take on how to invest based on cycles.

The topic was suggested by Rob. He's a member of our community, Money for the Rest of Us Plus. He also subscribes to a service that's called The Real Wealth Report, and it's sponsored or produced by Martin Weiss, W-E-I-S-S, of Weiss Research. I had not heard of that, but Rob brought it to my attention. Well, he says, well, a couple things. They're predicting something called the K-Wave. This is a cycle, and it will destroy the

the financial markets. Those are Rob's words. He says they're also really positive on gold. But he subscribed to this service because he was looking for reliable and unbiased investment information, which he thinks I provide. But at the time, he thought Martin Weiss provided it also. And you'll have to be the judge of that. So I started listening to the videos and the announcer comes on very gravely.

And says Martin Weiss, who is semi-retired, interrupted his travels overseas abruptly. And he rushed home to bring you an alarming prediction about the future. He says it's probably the most important forecast ever in his 46 years since he founded his company. And it's frightening.

On the flip side, though, there's going to be a tremendous profit opportunity. And later on, they talk about these 500% profit opportunities. Now, one of my rules in investing, as soon as somebody is predicting three-digit returns, 100% or more, that's a red flag.

Later, I got a copy of the transcripts, which made it so much easier. And the reason why I didn't watch them all is there's another red flag when it comes to any type of service, but particularly investing service. If the video player doesn't allow you to fast forward and there's no indication of how long the video is going to be, that's another red flag. That means it's going to be a long process. And at the end, they're going to sell something quite expensive.

But in the video, they mentioned Weiss rushed home from overseas. And at the same time, his cycles expert, Sean Broderick, had reached equally shocking conclusions due to a convergence of these time-honored economic cycles. And in today's episode, we're going to talk about these time-honored economic cycles and

and whether you can use them to actually invest, make investment decisions. They mentioned these cycles. They've driven world events since the time of the pharaohs. It's a long time. Now they're all coming to the head. There's five of them. There's the Kondratiev wave, the K wave. They say it's signaling Armageddon because of massively indebted governments.

And there'll be soaring unemployment, skyrocketing interest rates, massive defaults on public and private debt. They talked about another cycle, the juggler cycle. I want to call it the juggler, J-U-G-L-A-R. This is a 7 to 11 year economic cycle. And they're seeing that leading, signaling hoarding of cash by businesses.

Job destruction in a comatose economy. And then there's this 40-month kitchen cycle, K-I-T-C-H-I-N, predicting slower business formation, extremely weak consumer demand, and chronic unemployment.

There's a couple other ones, and they didn't give the specifics on these ones. The other three I could look up and I researched. But they also mentioned a 20 and 60-year economic cycle and a rising cycle of war. Sean says, their cycle expert, the next major convergence should start in late October or early November of this year. And it will...

will be the beginning of what you might call a roller coaster ride through hell. And that ride is going to last all the way until 2022, a full five years, which happens to correspond with the length of time for their service and get five years for the price of two and save $10,000.

It's about that time that I stopped watching the video and I decided maybe I should learn more about Martin Weiss. So I Googled him and his company. And the third result was an article that he had written in July 2015, Martin D. Weiss. And it was titled Larry Edelson's Shocking Forecast Forecast.

for 2015 to 2020. And he interviews, the transcript of their interview, Larry Edelson has since passed away, but he used to be co-founder of Weiss Research, or he was the co-founder of

In this, Edelson delivers what Weiss describes as his most important forecast in his 37-year career, which is just what Weiss had just done this year, his most important forecast in 40 years. Now, Weiss asks, is there a date? Because they use the same analysis, the same K-wave, the Juggler cycle, the kitchen cycle, and they're coming to equally shocking conclusions.

Larry says, it's October 7th, 2015, when we enter a new phase of the global economy, a phase when everything starts to hit the fan at once. It doesn't necessarily mean that a precipitous event will occur on that day. There may be and there may not be. But it does mark a line in the sand between

between two eras. Now, I find it interesting that the prediction period for the shocking forecast was still five years. So 2015 to 2020, the prediction from two years ago, today it's 2017 to 2022, using the same cycles, the same convergence of the K wave, the jugular cycle, the kitchen cycle. And that's one of the problems with cycles.

The timing, very subjective in terms of timing. And we'll focus a little bit more on cycles. They're interesting and there is some legs there. There's some validity to cycles. The economy works in cycles. A little more disconcerting, though, in my Google search was the fourth result. It was an SEC, Security and Exchange Commission, administrative proceedings against Weiss Research, Martin Weiss and Larry Edelson.

They found them in violation of SEC rules, particularly in terms of the promotional materials where they were telling subscribers that they could, quote, they followed their recommendations, scoop up 400 percent profits or, quote, bad profits like.

400%, 39%, 217%, 100%. And then they go on and on with all these three-digit numbers. The SEC found the overall performance of Weiss Research Premium Service did not support those profit claims. In fact, during the relevant time period, many subscribers who followed each Weiss Research trading recommendation experienced overall returns that

that were substantially lower than what Weiss researched within their profit examples. And most actually lost money. So that's Weiss research. But let's turn back to this idea of cycles. One of the first researchers that was intrigued by this in terms of the economy was a young Harvard economist, Edward R. Dewey. He was the chief economist for President Herbert Hoover.

President Hoover charged Dewey with figuring out what caused the Great Depression. And Dewey found these cycles. In fact, he founded the Foundation for the Study of Cycles. It was incorporated in Connecticut in 1941. The website, and I'll link to it in the show notes, says it's dedicated to discovering the mystery behind cycles. And they've identified 5,000 cycles.

5,000 cycles. Now, they point out a really important concept when it comes to cycles. It says on their website, the cycles may have been present in the figures you have been studying merely by chance. The ups and downs you've noticed, which come at more or less regular time intervals, may have just happened to come that way. And so the thing about cycles, it's important to, do they have a cause?

For many years, and Dewey studied this, they believed the stock market, its ups and downs in the economy was related to activity on the sun, sunspots. Now, some think it's very, very difficult, even when we know the odds of something happening.

This is from a book, Fluke. I talked about this a number of episodes ago, called The Math and Myth of Coincidence by Joseph Mazur. He writes, suppose you toss a coin 10 times and it comes up heads seven times. The proportion of heads to tail is then seven to three. Now, popular intuition suggests that for the next 10 tosses, tails should be seven to three.

should appear more than six times to counterbalance the more than expected number of heads that have already appeared. But the coin has no memory of what it did before, only a history recorded by the person who is watching the result. There is nothing to prevent the coin from coming up heads for the next 500 tosses. And yet we would be surprised

If it did, the problem with cycles, if we're just observing the data, we could have this predictable cycle that has nothing to do, no cause, and it's completely by chance. Something that where we actually know the probabilities 50-50, tossing a head or a tail with a coin, the more often you do it, Mazur points out, even though the overall results will coalesce to the 50-50 probability,

The longer you do the trial, the more likely you'll get results. These long strings of just head, head, head, head, head. Coincidences. What's the chance of that? That's usually what we say when we have a coincidence. I had an astounding coincidence the other day. It

It was in California, Orange County, attending podcast movement. The day before, Netflix, I don't know why it was on Netflix. It was at a conference. But it was on Netflix. And they were promoting a comedy special by Ryan Hamilton. It was titled Happy Face. I hadn't heard of Ryan Hamilton, but I thought, well, who is this? Special wasn't out yet, so I decided to check it out, his comedy routine on YouTube. Very talented. Turns out he's from Idaho, Ashton, Idaho, just about an hour north of here. He lives in New York.

So I'm flying home and I'm in the Orange County airport. I'm waiting for my flight. And who walks down the hall, down the tarmac? Ryan Hamilton, the very same guy, the very same comic right there. Now, what is the chance of that? Maybe one in a million. But here's something interesting that Mazer points out. He writes,

If you leave your house, a great many encounters and happenings are possible. The probability of each may be small, but when we group them together and ask for the probability that at least one of them will happen, the likelihood goes up. In other words, one in a million, the chance of running in to Ryan Hamilton. But another event, completely independent, if

If its odds are one in a million, in all these other one in a million events, it's actually additive. The likelihood of 5,000 independent events that each have a one in a million chance of happening, the odds of at least one of them happening is 5,000 out of a million. Then the odds go up.

And if there's a million events, there's an almost certainty that one of them will happen. And that's what coincidences are. And so when we look at these cycles, we have to say, is it a coincidence?

The foundation for the study of cycles says that the more a cycle has dominated, the more regular it is, the more times it has repeated, the more likely it is to be the result of real cyclic force that will continue. In other words, it's not just a coincidence. They go on, if it has not dominated enough or has not been regular enough, you must have more repetitions to get equal assurance.

Now, the first cycle, these long wave cycles, the Kondratiev cycle, developed by Nicholas Kondratiev. He was a Russian economist in the 20s, and he noticed these long patterns. He started focusing more on pricing data, inflation, or production data.

Generally, these cycles were about 50 years or so. And that's what he noticed. The first one he identified started in the late 1780s. And he during his life, he developed or identified three waves. Now, I found a really fascinating paper because I was trying to figure out, is there any validity to cycles?

cycles. The paper was written by two academics. It's called A Spectral Analysis of World GDP Dynamics. And it was written by or researched by Andrei Korotayev and Sergey Tsirel. I'll link to it in the show notes. So he looked at these patterns in relation to interest rates, foreign trade, coal,

pig iron production, which is a form of raw iron for many of the major economies. So England, France, the United States. And you notice these long waves where GDP or not just GDP, but these other measures went through periods. They went through an up cycle and then they went through a down cycle.

So these academics wanted to take this data, world GDP, gross domestic product, as a measure of output. I mean, the whole point of a cycle is, you know, do these long cycles exist? Now, Condratief started thinking it was just sort of this economic data. But since then, sort of later proponents says it has to do with technology innovation. So major innovations, railroads, steel, coal.

are what lead to these 50-year cycles as the adoption of the particular technology automobile leads to an acceleration of economic growth. And when it gets widely adopted, you have a slowdown and then a new wave of technology comes along. And so what these academics are doing is saying, well, is there any truth to this? So they did a spectral analysis, which is sort of just taking the data and seeing if there are these waves. Are there peaks? Are there troughs?

And they found, yes, there was. They identified and contradicted, there are five waves. And they found that GDP, like the most recent upcycle is the fifth wave, GDP has increased about 3.5% annually.

This is starting from, and here's the trick, it depends on the time period. So 1992 to 2007, GDP was at 3.5%. During the phase four down period, so roughly 1974 to 1991, GDP only grew at 3%.

Now, earlier in the cycle, phase two, for example, the up cycle GDP grew at 2% a year in the down cycle 1.7. So it's not like it was a recession. It just didn't grow as fast. And the waves have to do with, again, different technology coming on board.

Here's the frustrating part, though. The time frames are extremely subjective. And so when something like Weiss is saying that, well, the cycles are saying we're headed for an Armageddon of debt and debt defaults based on this 50-year contrative cycle.

It doesn't have anything to do with that. It was this technology. And one of the challenges, so this study was done in 2010, and they're looking at the Great Recession had started and was in the midst of it. They couldn't tell whether this was a continuing downswing of the fifth wave, the beginning of a sixth wave, or actually a temporary blip. And so the fifth wave was going to continue onward.

The time periods were years. So it's a 50-year cycle. There's no way to interpret what's going to happen with the stock market or other investments based on a 50-year cycle. Nor can you do it with the jugular 9 to 10 year. Even there, there's some descriptions. Is this a 7 to 9-year cycle or a 10 to 11-year cycle?

I pulled up a graph on that Davis Research and it showed the periods of recession and expansion. Sometimes it was five-year gap. Sometimes it was a 10-year gap. And this was just looking at downturns in gross domestic product. Recessions happen. There's overproduction. We're investors, consumers. We decide we don't want to buy as much. Companies cut back production or they have too much inventory. So they cut back production. It leads to recession.

But it doesn't follow an exact timeframe. There's cycles, but we can't say all five cycles are going to converge next month and all hell is going to break loose in terms of a rollercoaster ride. You can't do it. Can't be done. The time periods are too subjective. So what do we do instead?

We monitor investment conditions. Here's how one of my investment mentors, Howard Marks, he is the chair of Oak Tree Capital. This is a distressed debt, private capital firm. I invest with them as an investment advisor at a number of clients that had assets with them. He isn't promising 100% returns. He has the requisite humility you need as an investment advisor.

He says, I would never say when referring to the market, get out.

and it's time. I'm not that smart, and I'm never that sure. The media like to hear people say, get in or get out, but most of the time, the correct action is somewhere in between. He told Bloomberg, investing is not black or white, in or out, risky or safe. The key word is calibrate. The amount you have invested, your allocation of capital among the various possibilities

And the riskiness of the things you own all should be calibrated

along a continuum that runs from aggressive to defensive. He's talking about what we do at Money for the Rest of Us and on Money for the Rest of Us Plus. We monitor investment conditions. We want to know where we are in the cycle. We recognize cycles are there, but we can't time it exactly. Marx goes on. He says, we may not know where we're going, but we sure as heck ought to know where we stand. How

observations regarding valuation. Investor behavior can't tell you what will happen tomorrow, but they say a lot about where we stand today and thus about the odds that will govern the intermediate term. They can tell you whether to be more aggressive or more defensive. They just can't be expected to always be correct and certainly not correct right away.

As an investor, I'm an incrementalist. I look at valuations. I look at economic trend data like PMI. I look at the level of fear and greed. And I put that together for my own benefit and for the benefit of members of Money for the Restless Plus so they can have data to fill the information gap to get to know where we stand, to know should we be more aggressive in our investment or should we be pulling back and be...

more risk averse because the odds of a major downturn are increasing. Not that we absolutely know it's going to happen in October 2017, as Weiss suggests. No, we have to just calibrate our risk, as Howard Marks talks about doing.

Howard Marks on cycles says, up and down cycles are usually triggered by changes in fundamentals and pushed to their extremes by swings in emotion. Everyone's exposed to the same fundamental information and emotional influences. And if you respond to them in a typical fashion, your behavior will be typical, procyclical, and painfully wrong at the extremes. To do better, to succeed at being contrarian,

In anti-cyclical, you have to have an understanding of cycles, which can be gained through either experience or studying history, and be able to control your emotional reaction to external stimuli. That's wise advice. Successful investors control their emotions. They know where we stand in the current cycle. They know what economic trends are. They know

what valuations are. And that's how I invest. That's why I put together Money for the Rest of Us Plus, to provide that type of information to members that seek that out. Not everybody wants that. That's not for everyone. That's how I invest. And that's how I have invested professionally. And that's why I invested with firms like Goat Tree, because they had humility. They didn't say like Weiss said.

said the announcer at the end of the video. Very ominous, she says. We've been warned. Sean and his team, the experts who called nearly every major economic investment event over the past 40 years, nobody's that good. Heck,

have given us their forecast for the next five. They've told us what will happen. They have told us when it will begin. They've explained what we can do to prepare, to protect, and even grow our wealth, even as other investors lose everything. I don't believe it. Nobody is that smart. We just have to know where we stand, control of our emotions, calibrate our risk based on investment,

conditions. Before we continue, let me pause and share some words from this week's sponsors. As many of you know, I used to be an institutional investment advisor. I advised clients like the Texas A&M University System, the Sierra Club Foundation, and others strategizing investments across billions of dollars. To help, I had access to top-tier tools and information, which was crucial for making smart investment decisions.

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Investing in Cycles. I last covered this topic in episode 173. It was titled, Should You Invest Based on Cycles? And in that episode, I quoted extensively from Howard Marks. In his latest book, Mastering the Market Cycle, he writes, there are three ingredients for success, investing success. Aggressiveness, timing, and skill. And if you have enough aggressiveness at the right time, you don't need...

much skill. And then he digs deeper into those ingredients. He really goes through how to invest and he points out that positioning and selection are the two main tools in portfolio management. And by positioning, he's talking about cycle positioning. He describes that as the process of deciding on the risk posture of your portfolio in response to your judgments regarding the principal cycles. And cycles are

or patterns. He has a chapter where he talks about the economic cycle, the profit cycle in terms of corporate profits, the credit cycle. How willing are banks to lend the ability of companies to issue bonds in the bond market? You can often judge where we are in the credit cycle by the incremental yield that you get for investing in bonds above risk-free U.S. treasuries. Are

Other cycles are the real estate cycle. And one of the most important cycles when it comes to cycle positioning is investor psychology, their attitudes, their level of fear and greed. And where we are in the cycle, all these cycles, the economic cycle, the corporate profit cycle, it arises from human psychology and behaviors. Decisions that we make as individuals, whether we're going to buy more, we're going to borrow more, those influence

The cycles. If we were automatons, completely rational, and markets were extremely efficient, we wouldn't have cycles because everything would just move like clockwork. But because households and businesses overreact, they get overly fearful, they get overly zealous, that leads to cycles. And so we have cycle positioning and we have to decide how aggressive or defensive we want to be. That's the main positioning when it comes to

to cycles. He writes, the choice between aggressiveness and defensiveness is the principal dimension in which investors position portfolios in response to where they think they stand in the cycles and what that implies for future market developments. In other words, increasing and decreasing exposure to market. So by aggressiveness, he defines that as you increase risk, you risk more of your capital, you hold lower quality assets.

You make investments that are more reliant on favorable macro outcomes. Perhaps you employ financial leverage. Defensiveness, you would reduce risk. You invest less capital, hold more cash, emphasize safer assets, buy things that can do relatively well even in the absence of prosperity. And you shun leverage. So that's the first step, the first tool, the positioning and whether to be aggressive or defensive.

The second tool then is asset selection. He describes that as the process of deciding which markets, market niches or niches, and specific securities or assets to overweight and underweight. How do you implement your views based on where we are in the cycle? Now, we can implement our positioning on the cycle. We can do it passively through index funds and ETFs. And that's primarily how I use

implement my investment decisions. And it's what I share on Money for the Restless Plus. We look at where we are in the cycle and in the model portfolios and my personal portfolio. We take a positioning and we implement it primarily through passive investing. But that isn't the only way to do it. You can have a view on an asset's

intrinsic value. What is it worth? What is the present value of that future dividend stream or cash flow from that asset? You calculate that and you compare that intrinsic value to the price. And if the particular asset is priced less than the intrinsic value, then you potentially buy it. He writes, Marx, the key prerequisite for superior performance in this regard is

above-average insight into the asset's intrinsic value, the likely future changes in that value, and the relationship between its intrinsic value and its current market price. Investors who follow a given asset have or should have opinions regarding its intrinsic value. The market price of the asset reflects the consensus of those opinions, meaning investors collectively have set the price. That's where buyers and sellers agree to transact. The

The buyers buy because they think it's a smart investment at the current price and the sellers sell because they think it's fully priced or overpriced there. And he goes on and asks, what about the accuracy of those views? And he talks about the theoretical side of it. The efficient market hypothesis, he writes, states that all available information is incorporated into those prices efficiently. That the prices equal the intrinsic value all the time. If you're an active investor,

investor actively selecting specific securities, that cannot be your view. Now, when we look at it from a logical standpoint, what we're saying is if the price is set by all investors, then we have to assume that those investors are wrong if we're going to buy that specific asset. The average is the average, he points out. And so we have to be above average by thinking everybody else is wrong. What's our informational edge? And then he points out the empirical side of it.

Performance shows, studies, very few investors consistently outperform the market. But that's kind of where we are when it comes to how to invest. You position it based on cycles. You decide where we are and then decide how aggressive or defensive we want to be. And once we make that decision, then we have to decide how to implement that. Implement it passively or implement it actively using the skill to figure out which assets are mispriced.

and implement it that way. Marx points out that with investing, there's an element of skill and luck. Skill, he describes, is the ability to make these decisions, these positioning decisions regarding cycles, the asset selection decisions, that do so that generally are on balance correct, although not in every case, and do so with a repeatable intellectual process and on the basis of reasonable assumptions regarding the future.

I believe I have investment skill. I do not have the skill to identify securities that are mispriced in terms of the market price relative to the intrinsic value. The exception would be closed-end funds. Closed-end funds are like mutual funds. They trade on an exchange. They're primarily owned by individual investors.

These individuals panic, particularly during times of fear, and the net asset value, the intrinsic value, you can see as plain today. It differs from the market price. That I can do. But to purchase an individual stock, and I believe that Amazon or some other company is mispriced, I can't do that. But I have invested professionally in a way where I've identified market cycles and positioned accordingly.

been willing to be more aggressive during times when other investors were fearful or where I felt like an asset class was too cheap, that investors had overreacted. And I've been able to pull back risk when investors are overly zealous. But still, there's an element of luck. That's what happens when, even though you have reasonable assumptions, that things just don't go your way, that things don't happen naturally.

as they're expected to happen, particularly in the timing.

Over the long term, he says, and luck is the wild card. It can make good decisions fail and bad ones succeed, but mostly in the short run. In the long run, it's reasonable to expect skill to win out. But he admits it's hard. It's hard to be an investor. It takes practice. It takes decades of practice. That's why we start small and you kind of have to pick your spots. I'd rather spend my time researching cycles. Where are we? What are market conditions today? And that's what we

we do a Money for the Rest of Us Plus, which, by the way, is now open for new members. So you can go to moneyfortherestofus.com and learn more about that.

The other thing he points out in his examples that he gives in his book, they're all extreme environments. He talks about the nifty 50 in the early 70s and late 60s, the internet bubble where I was investing during that time, the financial crisis, or after the internet bubble, the opportunities that were there in 2002 and 2003.

the high risk going into the financial crisis and the opportunity afterwards. He says, we want to get the market's tendency on our side. We don't know absolutely what's going to happen, but he writes, if you invest when the market's tendency is biased toward favorable, you'll have the wind at your back. And an example he gives is during the financial crisis, 2008, they were buying after October, 2008, when Lehman went bankrupt, they invest in distressed debt, which in

in some ways is easier than stocks. Because with distressed debt, you're buying bonds that have defaulted. They're selling for 25, 30 cents on the dollar, maybe 40 cents. And it's a negotiation process to get together with a credit committee and they negotiate terms, usually perhaps a bankruptcy judge in place. And the idea is that you'll get, you buy it 25 cents on the dollar and you get 50 cents on the dollar. It takes patience. It takes time. They were investing.

Systematically, I think they said a half, $500 million a week. He says you can't catch a falling knife because you never know where the bottom is. And investors that say you can't catch a falling knife and are trying to wait for the bottom, he says often by the time the bottom is there and things look clear, you don't find the bargains anymore. Now, as an individual investor, you have the advantage because you're not trying to put $500 million to work. You can be patient.

But when I invested with Oak Tree Capital in December 2008, they run the Vanguard Convertible Bond Fund. I bought that fund December 11th, 2008. I put $40,000 to work. The Vanguard Convertible Securities Fund, VCVSX. I didn't know whether the bottom was there or not.

Turned out the bottom was on November 21st, 2008. The fund was selling, so it had fallen 29% or 35% from August 29th, 2008. So it had fallen 35%. Its low was on November 21st, 2008, $8.35.

Looks like I bought at about $8.98, but I didn't know. You just don't know. I was incrementally putting money to work in my personal portfolio as things were falling apart. Now, I waited really till March till you started to see evidence within PMI, these business surveys done around the world to see that things were

were starting to change a little bit, but you can't move completely out all at once and you can't move completely in all at once. You have to be an incrementalist. You're trying to have the market tendency on your side, but that's what positioning for market cycles is. It's easier to do during these extreme events like we saw in 2008. It's also the hardest to do because that's where it takes the most fortitude. And that's why you kind of have to be gradual in your approach.

So I bought this convertible bond fund. I sold half in March 2010, sorry, May 2010, and the other half August 4th, 2011. So I made $23,000 or 58%. That was just one investment. And I didn't know. You can't know.

He says when a market is cascading downward, investors can often be heard to say we're not going to catch a falling knife. In other words, the trend is downward and there's no way to know when it'll stop. So why should we buy before we're sure the bottom has been reached? What I think they're really saying is we're scared, in particular, of buying before the decline has stopped and thus of looking bad. So we're going to wait until the bottom has been reached, the dust has settled, and the uncertainty has been resolved.

You can't. And it's embarrassing to buy early. We bought emerging markets three weeks early in 2008. We bought some US stocks early in 2008 in our institutional portfolios. And it was embarrassing. But that's part of investing because we can't. We make inferences about what's happening. We try to get in line with the market tendencies. We try to have reasonable assumptions and then we invest.

And that's how to invest based on cycles. I have enjoyed teaching about investing on this podcast for over eight years now, but I also love to write. There's a benefit to writing over podcasting, and that's why I write a weekly email newsletter called The Insider's Guide.

In that newsletter, I can share charts, graphs, and other materials that can help you better understand investing. It's some of the best writing I do each week. I spend a couple of hours on that newsletter each week trying to make it helpful to you. If you're not on that list, please subscribe. Go to moneyfortherestofus.com to subscribe to the free Insider's Guide weekly newsletter.

Everything I've shared with you in this episode has been for general education. I'm not considered your specific risk situation. I have not provided investment advice, simply general education on money, investing and the economy. Have a great week.