Market cycles remain one of the most misunderstood concepts in finance. Investors often react emotionally to short‑term volatility, forgetting that expansion and contraction phases are natural. Recognizing where the economy sits within a cycle can guide smarter asset allocation. During late‑cycle periods, defensive sectors and quality bonds may offer stability, while early‑cycle phases often favor equities and growth assets. Staying disciplined and avoiding reactionary decisions is key to long‑term success. Historical data shows that patient investors typically outperform those who attempt to time the market.
Source: https://www.federalreserve.gov
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