Winning with ETF Strategies: Top Asset Managers Share Their Methods for Beating the Market

2. How Markets Move

Is this a good time to buy stocks, and where in the market cycle are we? Figure 2-1 shows that markets move in cycles. These cycles usually take several years to complete.

Figure 2-1. The market moves in cycles. (Source: Rydex/SGI Investment Management)

Figure 2-1 shows that starting in 1896, the market climbed for 9 years and had a cumulative return of about 149 percent, a good return. Then the market went sideways for 18 years. Money invested during these 18 years was dead money. Although the cumulative loss for those 18 years was only about 4 percent, the opportunity loss could have been substantial. If a person needed cash ...