A Full Market Cycle - Defined
What is a full or complete market cycle? When we say "across a full market cycle, what do we mean?
A complete market cycle (or a full market cycle) is defined as a period of bull, bear, and bull periods generally lasting 4-5 years.
The 5 years from 2005 to 2010 is one of the greatest examples in history. During those years, stocks were rising sharply through 2007 and then reversed down over -50% and then moved back up nearly 70%. It was the highest volatility ever recorded since the Great Depression. That is true both in terms of the swings and the average daily range in prices. From April 2005 through April 2010 the S&P 500 stock index ended with a slight loss across the full market cycle. The Asymmetry Portfolio has an absolute return objective; the aim is to create profits across a complete market cycle.
A picture speaks a thousand words. Below is a 13 year chart of the S&P 500 stock index presenting full market cycles.
