Knowing where YOU are in any cycle

How Cycle Awareness Shapes Decisions and Outcomes

The Rhythm of Life and Beyond

Life unfolds in a series of cycles—predictable rhythms that shape our growth, challenges, and achievements. From the moment of birth, we intuitively sense our place in the human life cycle: infancy is marked by foundational security, childhood by exploration, adolescence by turbulence, adulthood by stability, and the later years by reflection and wisdom. Each stage builds upon the last, fostering personal development and insight.

Just as life progresses through distinct phases, our careers follow a natural arc. Most professionals move through five key stages: exploration, establishment, mid-career, late-career, and disengagement. During exploration, individuals try various roles and build skills. The establishment phase is characterized by advancing in a stable position, often accompanied by both exhaustion and empowerment. Mid-career brings peak productivity and leadership, late-career emphasizes mentoring and winding down, and disengagement involves retirement planning. Recognizing your position within these cycles enables smarter decisions.

However, this intuitive understanding does not always translate to broader cycles, such as those found in economies, markets, and societies. In investing, mistaking a boom for endless growth can result in losses, while recognizing downturns as temporary creates opportunities. Awareness of cycle position is a competitive edge, allowing you to strategically position your capital and turn uncertainty into advantage. Mapping cycles—ranging in length from months to centuries—can impact everything from commodity prices to geopolitical stability. The foundation of participation in these cycles is discipline. Building capital starts with small steps, such as automating 10-20% of income into savings. Without disciplined saving of capital you can not participate in capitalism.

The Imperative of Cycle Awareness in Investing

Cycles are the unseen currents that steer asset prices, policy decisions, and global events in the financial world. Short cycles, such as quarterly business fluctuations, demand tactical agility, while long cycles, like generational economic resets, require patient, multi-decade planning. For example, those who recognized the trough during the 2008 financial crisis invested in undervalued assets and benefited from the subsequent expansion.
Knowing your position within a cycle allows you to leverage opportunities. In an early economic recovery, cyclical sectors like industrials prosper, while defensives like utilities perform better in late stages. This data-driven approach is illustrated by current statistics: as of early December 2025, the Atlanta Fed’s GDPNow model estimates U.S. GDP growth at 3.5% annualized for Q3, with inflation at 3.0% year-over-year, indicating a robust mid-cycle phase amid ongoing Fed easing. Always verify real-time data through reliable sources such as the Bureau of Economic Analysis.

Exploring Key Cycles: From Personal to Global

The Career Cycle: Professional Milestones
Career cycles typically span 20-40 years and are shaped by technological shifts. The exploration stage (ages 18-25) is akin to investing in growth-oriented stocks, marked by risk-taking and learning. Establishment (25-35) focuses on building expertise and steady compounding, similar to balanced investment strategies. Mid-career (35-45) features peak output and optimization, with real estate providing leverage. Late-career (45-55) emphasizes mentoring and income stability, favoring defensive dividend stocks. Disengagement (55+) centers on retirement and capital preservation, using strategies such as gold for inflation protection. Awareness of these stages helps prevent burnout and informs key decisions, such as upskilling or reallocating assets before market peaks.

Economic Cycles: The Business Pulse

Business cycles generally last 5-7 years and consist of four phases: expansion, peak, contraction, and trough. The National Bureau of Economic Research (NBER) identifies these phases using metrics like GDP and industrial production. Following the recovery from 2020, we remain in an ongoing expansion phase as of December 2025, with the Federal Reserve reducing rates from 5.5% to the 3.75%-4.00% range.

Commodities Cycles: Supercycles of Supply and Demand

Commodity cycles often extend over 10-30+ years, driven by industrialization and global demand shifts. Key indicators include surging demand from emerging markets and supply bottlenecks. The current cycle, which began in 2020, features rising prices for oil and metals due to increased demand.

Interest Rate Cycles: The Fed’s Lever

Interest rate cycles, averaging 5-10 years, oscillate between rate hikes to control inflation and cuts to stimulate growth. The historical peak was 20% in 1981, and the current cycle started with hikes in 2022 but is now easing. Yield curve inversion, a recession signal, was present but has since uninverted and remains positive as of December 2025, suggesting recovery.

The Rise and Fall of Empires: Geopolitical Long Waves

Empires follow a 200-250 year cycle, as described by Ray Dalio’s “Big Cycle” theory: rise, top, decline. Historical examples include the Dutch, British, and American empires. British historian Arnold Toynbee and Sir John Glubb outlined seven stages: Pioneers, Conquests, Commerce, Affluence, Intellect, Decadence, and Collapse, typically spanning around 250 years. Currently, the U.S. debt-to-GDP ratio of ~124% signals a late-cycle stage, favoring diversification and investments in rising powers.

The Cycle of Political Economy: From Capitalism to Collapse

The cycle from capitalism through socialism to communism and collapse echoes Alexander Tytler’s apocryphal cycle, which describes democracy’s 200-year arc: Bondage → Faith → Courage → Liberty → Abundance → Selfishness → Complacency → Apathy → Dependence → Bondage. This concept aligns with “The Fourth Turning” by Strauss and Howe, which details 80-100 year saecula comprising four phases: High, Awakening, Unraveling, and Crisis. The current period is considered the Fourth Turning’s Crisis (2008-~2030), marked by polarization and debt. These cycles interconnect, with empire decline accelerating economic contractions and increasing the appeal of commodities as safe havens.

Ways to Pinpoint Your Position in Any Cycle

Understanding cycles requires a blend of historical data, leading indicators, quantitative models, and technology. The following framework provides guidance:

Historical Pattern Matching: Compare current events to past cycles using archives like the NBER and FRED database for economic indicators.

Leading Indicators: Monitor signals that precede cycle turns, such as:

a. Economic: Conference Board Leading Index; rising values indicate expansion.

b. Commodities: Inventory levels and futures curves; contango suggests oversupply.

c. Rates: Inverted yield curve predicts recessions 12-18 months ahead.

d. Personal/Career: Milestones like age and promotions; use journals for reflection.

Quantitative Models: Employ diffusion indexes (e.g., ISM Manufacturing above 50 signals expansion) and generational archetypes from “The Fourth Turning.”

Tech Tools: Utilize applications like TradingView for visualizing cycles and AI sentiment analysis for news trends.

For quick reference:

• Economic cycles: GDP growth above 3% suggests expansion; unemployment over 6% signals contraction.

• Commodities: Prices 50% above (or below) 10-year averages indicate boom/trough phase.

• Interest rates: Negative yield spreads mark the end of tightening.

• Empires/Political: Debt-to-GDP over 100% points to decline.

Regular quarterly reviews enable timely adjustments as indicators shift.

Leveraging Cycles: Investment Strategies for Advantage

Strategically positioning capital according to cycle turns transforms defense into offense:
• Early Expansion/Trough: Invest in cyclical sectors such as industrials and materials; overweight equities. For example, post-2020, technology stocks surged by over 100%.
• Mid/Peak: Rotate sectors toward consumer discretionary stocks and reduce leverage.
• Contraction: Favor defensive sectors like healthcare and staples, bonds, utilities/pipelines and gold during crises.
• Long Cycles: During times such as the Fourth Turning Crisis, diversify globally and hold inflation hedges.
Risk management is essential. In downturns, tax-loss harvesting can increase after-tax returns by 1-2%.

Conclusion: Discipline as the Ultimate Cycle-Breaker

Cycles are inherent to life, careers, and economies, but ignorance of them is optional. By identifying your position in personal, professional, and global cycles, you gain foresight to save diligently, invest confidently, and stay ahead. Capital is your entry ticket—make sure to position it on the ascending arc as empires rise and fall. For further exploration, consult “The Fourth Turning” and monitor indicators regularly.