Market Cycles: What History Teaches Us

Markets move in cycles, but the hardest part isn’t seeing them — it’s acting on them when everyone around you is doing the opposite.

The four phases

1. Accumulation — pessimism is high, value is quietly being built.
2. Markup — momentum builds, optimism returns.
3. Distribution — euphoria peaks, smart money exits.
4. Markdown — reality reasserts itself.

The pattern repeats because the driver is human psychology, not spreadsheets.

A practical takeaway

You don’t need to time the top or bottom. You need a process that survives all four phases. Position sizing, a long time horizon, and the discipline to do nothing usually beat cleverness.