Discovering the Rhythm of the $ystem

Imagine being a farmer who is not aware of the changing seasons. So much time, money, and effort would be wasted by planting, cultivating, and harvesting at the wrong times. Yet, this is how most people unknowingly live their financial lives.

Not being aware of where the economy is during an economic cycle is like being a farmer who is not aware of the month. You would have to do everything based on “feel.” While you may notice that the weather is once again warming up and think that it is time to plant, it may just be an unseasonably warm stretch in November.

If only you knew when the seasons in the economy change you could:

1. Increase savings for an approaching Economic Downturn.

2. Begin cutting expenses for a probable Recession.

3. Start spending and investing again early in the Recovery for better deals and larger gains.

4. Know the best and safest times to speculate.

By knowing when to do these four things and acting on them at the right times you can:

-        Protect more of what you earn and accumulate during the “Boom Years.”

-        Reduce expenses and increase savings at the right time to create a financial cushion before the hard times hit.

-        Protect your frame of mind when economic times are toughest and you need to think the clearest.

-        Have more cash to deploy at the best and safest times so you can accumulate more.

-        Do these things multiple times throughout your life which will move you further away from living paycheck-to-paycheck and closer to financial freedom.

Sounds great, right? The problem is that you can’t simply anticipate what to do next with your finances based on something as synchronized as a calendar. The good news is that there is still a way to track economic cycles. Much like the position of the Sun, Moon, and constellations are used to track the lapse of time, there are trackable patterns which repeatedly play out in economic cycles.

The trick is to know what to look for AND when to look for them throughout the cycle.

In the next post I will share something which I discovered when I consolidated all of my investing and trading notes over the past twenty years. While I only set out for a way to quantify my intuition for when there was a long term shift in markets, it ended up being an “ah-ha” moment when everything became clear and trackable.

While my intent was only to develop a better idea of how the rhythmic patterns of markets and economies flow, I feel that what I learned in the process was simply too important not to share.

Click the link below for the next installment in the The Rhythm of the $ystem series entitled, The Economy Tracker.

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