Why 18.6 years?
Each 18.6-year cycle consists of an average 14 years up and then four years down.
Each 14 years up can further be broken into two parts. Each one lasted around seven years, split by a mid- cycle slowdown or recession. The economy grows steadily during these phases.
The final two years of the 14 years up we call the “Winner’s Curse” period. During this time the animal spirits are truly unleashed, and speculation and excess are apparent everywhere. This is not the time to be all in and highly leveraged.
Finally, comes the four years of crisis, crash and recovery. If you can survive this period with your finances in order, then you can take advantage of amazing bargains.
This occurs in nearly all western countries, led by the US. In fact, in the US (and UK), the cycle has been occurring for well over 200 years.
Two Centuries of US Cycle History
Check out the chart below. It shows the volume of land sales in the US each year. Starting in 1800. Note the spike in land sales every 18 years. It’s uncanny. And note, with every peak in US real estate, a bust soon followed.
Source: The Secret Life of Real Estate and Banking
And this cycle has simply continued into the 21st century.
Have a look at prior real estate peaks back in ’73, ’89 and the big run up into 2007. You know what happened after that, right?
Source: The Secret Life of Real Estate and Banking
This is the boom-bust cycle in action, and its 18-year rhythm has been baked into the US economy right from the start.
Understand the cycle to build your wealth
Understanding the 18.6 year cycle is vital to your financial future. All of the major booms and crashes in the stock market and property markets, bar none, have been caused by the cycle.
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UNDERSTAND MORE ABOUT 18.6 REAL ESTATE CYCLE
The Secret Life of Real Estate and Banking
Tracing the entire history of the 18-year cycle in the United States from founding to 2008, this book shows how the banking system reacts to prosperity and recession and reveals how regulations – enacted after each collapse – tend to disappear when boom times return. With its invaluable insights and practical advice, this book is aimed at both novice and experienced investors who want to know why the economy moves as it does, how it can be forecast in advance, and how to profit from this knowledge.
The Secret Wealth Advantage
How you can profit from the economy’s hidden cycle
During your life you will make many important financial decisions. Their success will be significantly affected by the state of the economy and financial markets when you make them.
Imagine if you had a guide to the future to help you anticipate periods of boom and bust and make decisions accordingly: when to invest and take risk, and when to sell or take measures to preserve your wealth.
The Secret Wealth Advantage is that guide.
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