📖David Swensen
Market Cycles Awareness
Understand where you are in the market cycle.
Markets move in cycles driven by human emotion. Understanding where you are in the cycle helps you prepare for what comes next and position accordingly.
🏠 Everyday Analogy
📖 Core Interpretation
David Swensen highlights that many investment mistakes are psychological, not analytical. Managing behavior under stress is as important as finding ideas.
💎 Key Insight：Cycle awareness improves investment timing.
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❓ Why It Matters
In volatile markets, fear and greed push investors to buy high and sell low. A behavioral framework reduces avoidable, self-inflicted errors.
🎯 How to Practice
Pre-write decision rules, slow down trades during stress, and separate market emotion from business facts before adjusting positions.
⚠️ Common Pitfalls
Following crowd emotion at extremes
Mistaking confidence for certainty
Forcing trades to quickly recover losses
📚 Case Studies
1
Staying the Course in the Global Financial Crisis (2008)
Equities, REITs, and commodities plunged over 40% while Treasuries and high‑quality bonds rallied, severely testing diversified portfolios.
✨ Outcome：Maintained target allocations and rebalanced into falling assets, leading to strong gains as markets recovered over the following years.
2
Dot‑Com Bust and Diversified Equity Exposure (2000)
Tech and growth stocks collapsed after the late‑1990s bubble, while broad value, international, and small‑cap exposures fared better.
✨ Outcome：Avoided concentrated tech bets, kept diversified long‑term allocations, and benefited as non‑bubble equities and later markets recovered.
📌 Save this principle as your rule
One click to drop it into your personal rule library — every future trade will be scored against it.
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