The business cycle works

The business cycle works. I am absolutely convinced it should be a crucial element of your investment strategy.

It is all a matter of odds. When the economy is weak and the Fed is easing one should expect (again, it is a matter of odds):
1. Short-term interest rates decline
2. Bond yields decline
3. Financial risk declines
4. High-yield bonds are strong and outperform stocks
5. Financials, insurance, brokerage, asset managers, REITs, ... are the best bets.
6. Commodity-driven stocks under perform

When the business cycle turns up and the economy grows at or above potential the leading sectors change and your strategy should reflect the changing business cycle.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977