The growth of the economy peaked in 2011 (end of Phase 2). Since 2011 we have been in Phase 3. Beginning in 2015 the real economy started sliding into Phase 4, characterized by very slow growth. Possibly a recession.
Why do we care about trying to understand what is happening to the business cycle?
The growth of the economy has an enormous and defining impact on the prices of all asset classes - from gold to equities to any commodity to bond yields.
Since 2011 investments in commodities, commodity-sensitive investments/stocks, gold or any hard asset has provided very poor returns.
The returns have been generated by staples, healthcare, discretionary, REITs, bonds
This is exactly what you should expect during any business cycle. The time to invest in real assets and commodity-sensitive investment is when the economy moves from Phase 1 to Phase 2 as it did in 2009-2011.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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