Did you see a bull market coming in 2023?
If you were tuned into the mainstream media, you wouldn’t have… but as a Cycles Trading reader, you should have…
And here we are: The common definition of a bull market is a 20% rally from a low.
The S&P 500 is up 27% after a 25% plunge between January and October.
So that’s a bull market… and then some.
I’ve Been Telling You How 2023 Will Shake Out
This year, three regional U.S. banks collapsed after the worst bank runs since the 1930s.
The Fed jacked up interest rates several times.
And you can’t turn on the TV or go on social media without hearing about a looming recession.
But I’ve been telling you we’re entering the most bullish phase of the real estate cycle – the Eleventh Hour.
I hope you’ve been paying attention.
Because the next two years will make or break your retirement.
I’m sure you know people whose portfolios are still recovering from the 2008 crash…
And I want to help you avoid that fate.
You see, I’ve predicted every major market turning point over my 34-year career, including:
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The housing crash in the early 1990s
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The dot-com crash in 2000
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The bull market in stocks from 2003–2007
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The housing crash in 2007 and the global financial crisis (“GFC”)
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The bottom in stocks in March 2009 after the GFC
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The bull market in stocks in the 2010s
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The pandemic-induced crash in early 2020
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The selloff in 2022
But I’m not forecasting. I call it, “remembering the future.”
Mainstream forecasters try to predict market moves based on jobs data… manufacturing surveys… and whatever the bond market is signaling about the economy.
They’re looking ahead, in other words. And they’re trying to see what’s coming next.
But I’m a keen student of market history. Economists these days have short memories, and no context of history. Every event they call “unprecedented” in fact, always has precedents.
It’s an 18.6-Year Cycle
I make my predictions based off an 18.6-year cycle markets have followed for hundreds of years. That’s the time it takes for one boom-bust cycle. And it keys off research from an obscure British economist named Fred Harrison.
In his book, The Power in the Land, Harrison showed this was the average time for a full boom-bust cycle in the British real estate market.
Harrison also showed how this cycle drove the stock market. And thanks to that research, he was one of the first people to predict the 2008 global financial crisis.
In 2005, he warned that the next property market “tipping point” was due at end of 2007 or early 2008. And he warned that the only way prices could return to affordable levels was a “slump or recession.”
I wrote my own book about this cycle, The Secret Life of Real Estate and Banking, and found that the U.S. also follows this cycle going back hundreds of years.
You can see the cycle play out in this chart from my book. It’s of U.S. public land sales from 1800 to 1923.
You can see the cycles in action here.
In 1818, land sales in the U.S. peaked. An economic downturn followed. Sales peaked again in 1836 with a depression following. The next peak was in 1854. And again, a depression followed.
After 1923, there wasn’t much public land left to sell. But what we’ve seen is that for the first 144 years of real estate enclosure in the U.S., land sales peaked roughly every 18 years.
There’s a lot more evidence of the cycle at work in my book. For today, what you need to know is it repeats through history, and it affects the stock market.
I said this recently:
Most people either forecast the real estate market or the stock market. But I tell my subscribers that real estate investors need to understand the stock market… and stock market investors need to understand the real estate market. They’re closely related.
At the bottom of 18.6-year cycle, the stock market leads the way into the next upcycle. And at the top of the cycle – which we’ll shift into over the next couple of years – the real estate market peaks first.
So, if you’re a stock investor, you should be watching land prices and the prices of stocks that operate in the real estate business.
If we go back to the peak of the stock market in 2007, the homebuilders and the land developers warned it was coming. They peaked in 2005. That was a hint for stock market investors to get more defensive with their portfolios.
But we’re not there yet. Despite all the warnings this year about a collapse in the real estate market due to higher mortgage rates, that hasn’t happened.
Take a look at the table below that I’ve put together for you. It shows the different phases of the 18.6-year cycle.
I’ll Tell You When to Get Defensive… But We’re Not There Yet
The point is… if you followed my advice and stayed bullish this year, kudos. You’ve caught a big upswing in the market.
And if you were caught off guard by the new bull market, don’t worry. I’ve got you covered…
I went live on Wednesday during an event called the Eleventh Hour – Last Chance to explain the cycle I track and how to profit from it.
I revealed how we won’t hit the top of the cycle until mid-decade… and how there’s never been a crash at this stage in more than 200 years of data on this cycle.
People who tuned into my first-ever appearance in the U.S. media just over three months ago have already booked a 51% win…
And if I’m right about where we are in the cycle – and it’s never failed in over 223 years of data – this is sure to be only the start of much more powerful stock market rally.
So make sure you check out the replay right here.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson