The Joseph Cycle - Simon Sim

Image by alemdag via Flickr A nice quote I got from "The Joseph Cycle" by Simon Sim.

The more you save, the more you will have. Saving creates wealth; wealth attracts more wealth. Thus, it is said, "Money makes money!".

Anyway, the Joseph Cycle is a good read for people who are interested in economic cycles and how it can help in stock investment. For those in a hurry, the gist of the book is in credentialing and validating the Biblical Joseph Cycle of 7 Fat years and 7 lean years. The Joseph Cycle equates to a 7 year bull and 7 year bear in the stock market. After which, Simon mentions that for most, we have only 2 opportunities within our lifetime to take advantage of these cycles. The beginning of the last bull started in 2001 and will end somewhere inside 2008. After which, there will be the 7 years bear from 2009-2015. Thus, the year 2015 will be the bottom as well as the next start of a bull and if we believe in the Joseph Cycle, we will do well to invest during the start of the bull and hold on till the end of the cycle, ignoring most crisis along the way. But he does mentioned that you can still invest even if it's a bear cycle as long as the stock is undervalued or a crisis present an opportunity.

My conclusion? Well, it means that life carries on and we still will have to stick to our usual investment philosophy of asset allocation. For stocks, buying quality companies at fair prices giving fair dividends. For mutual funds, just let it grow thru' the dividends reinvested (since the fund manager is supposed to be doing the stock picking for you).