Market Cycles & Seasonality

Why markets move in recurring patterns — and which seasonal effects really matter Markets don’t move randomly. They follow cycles shaped by the economy, psychology, liquidity, and politics — and they exhibit seasonal patterns that have repeated themselves over decades. This deep dive explains both: the major market cycles the smaller, seasonal patterns Beginners will understand why markets don’t move in a straight line — and advanced investors will recognize how timing risks arise. 🔄 The Four Major Market Cycles Every market goes through the same phases — over and over again These cycles are universal: 1. Recovery After a recession: low valuations low interest rates rising earnings increasing risk appetite 👉 Stocks rise early, often before the economy visibly picks up. 2. Expansion (Boom) The economy is running strong: high earnings low unemployment rising investments rising valuations 👉 Euphoria phase, risk is underestimated. 3. Slowdown Growth is slowing down: earnings stagnate interest rates rise risk is reassessed volatility increases 👉 Markets react earlier than the economy. 4. Recession (Contraction) The economy is shrinking: earnings fall unemployment rises r …