Pursuant to my previous blog post about market cycles and “4 Seasons Investing “, there is another way of explaining the market cycles i.e “Investment Clock “.
The idea of an investment clock has been around for decades and it captures two very important things in investment :
1) Business and Market move in cycle
2) No sector or asset class exist in isolation or can sustain without being affected by business cycles.
Below quoted from “Fidelity International“ should give you a very good understanding about Investment Clock Vs Market Cycle.
What is the Investment Clock?
Different asset classes and business sectors tend to perform better than others at different phases of the economic cycle. The Investment Clock shows which asset classes and stock sectors have historically outperformed in each phase of the economic cycle according to our research. The model was created by Fidelity to guide asset allocation in funds, and is not intended as a tool to predict …