The business cycle works

The business cycle works.

1...During the recession productivity increases as business cuts costs and becomes more efficient.
2...Labor costs adjusted for productivity improvements decline sharply.
3...Profits improve.
4...The Fed eases.
5...Bond prices rise.
6...The yield curve is steep.
7...The stock market rises.
8...Strong financial stocks.
9...The recession ends.

This is exactly what is happening now and it has always happened in phase 4 of the business cycle (click on the chart to enlarge it). Some trusted business cycle relationships repeat themselves because reflect human response to the changing economic environment.

To find out more about my in depth views 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, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 by Timer Digest

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