Investing with Cycles - Educational Piece

The Cycles Edge

Why Invest with Cycles: Asymmetric Return to Risk

Go ahead…put in $100,000. When you win, you win 9%. But when you lose, you lose 18%. Wait…hold on…this sounds like a bad deal…right? Sounds like asymmetric risk to return where the risk is double the return. Those numbers are the return and risk figures for the typical diversified growth portfolio I mentioned in Investing for Newbies Part 1. This is NOT favorable for investors. An asymmetric return to risk (return > risk) is a much better deal, which is possible if investors invest during the time when investments go up and sit out or protect their capital when the market comes crashing down. Cycles Edge was created for the purpose of finding asymmetric returns to risk, and this is done by combining effective investing techniques with the element of timing. Let’s go over how to invest with cycles.