National: Market Cycles & Income-producing Real Estate

Number Of Months From Peak-To-Peak of Each Business Cycle Since 1900

Information Source: Nat’l Bureau of Economic Research, Inc.

An investor needs three pieces of information for developing a reasonable investment strategy and the chart provides this information: (1) The average length of time from peak-to-peak for the prior twenty-one cycles is 58 months. (2) The current business peak was reached in March 2001. (3) We are presently 68 months into the current cycle. What have we concluded so far?

• Given the country’s current economic model, the economy is cyclical.
• Bull markets don’t last forever.
• Recessions don’t last forever.
• The average cycle for the past 100 years from peak-to-peak is 58 months.
• The peak for the current cycle was March 2001.
• We are 68 months into the current cycle.

This information gives an investor the next possible peak and the length of time needed for the subsequent peak. The average is 58 months. The shortest peak-to-peak business cycle is 17 months and the longest is 128 months. Given those conclusions, the real estate investor has to follow a sound investment strategy which includes techniques that insure staying power.

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