--- title: Why investors need to understand the market’s cycles - The Hustle description: When you understand the market’s cycles, they become less confusing, less scary, and more exciting. image: https://media.hubspot.com/hubfs/Imported%20images/TheHustle+HubSpot_Lockup.svg --- # Why investors need to understand the market’s cycles ![Morgan Housel](https://53.fs1.hubspotusercontent-na1.net/hubfs/53/assets/hubspot.com/web-team/WBZ/HubSpot%20Media/Blog%202021/Images/Nav/Optimized/TheHustle_Icon_Dark.svg) [Morgan Housel](https://hs-sbup.thehustle.co/author/morgan-housel) [Morgan Housel Twitter profile ](https://twitter.com/MorganHousel) Published: May 06, 2022 Updated: October 11, 2023 Attempting to make sense of the stock market becomes a little easier when you admit 2 things: ![Why investors need to understand the market’s cycles](https://media.hubspot.com/hubfs/Imported%20images/TheHustle+HubSpot_Lockup.svg) 1. Everything is cyclical. 2. Those cycles have less to do with economics and more to do with the stories people believe and the narratives they latch onto. In the last 2 years, we’ve gone from the biggest economic crisis since the Great Depression to a stock market that surged to all-time highs, to the worst start-of-the-year period for stocks since the Great Depression. #### **There’s a long history of these cycles** In general, they follow a similar path — boom to bust to boom again, over and over. This results in a shock cycle of investors’ moods that goes something like this: - Assume good news is permanent. - Ignore bad news. - Deny bad news. - Panic at bad news. - Accept bad news. - Ignore good news. - Deny good news. - Accept good news. - Assume good news is permanent. #### **Right now…** … we’re probably somewhere between panicking at bad news and accepting bad news. Inflation is causing havoc, but few are in denial about it anymore. Before long, the cycle will turn again. 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Signup for a free account Close modal ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Morgan Housel", "url" : "https://hs-sbup.thehustle.co/news/author/morgan-housel" }, "datePublished" : "2022-05-06T07:55:15.000Z", "headline" : "Why investors need to understand the market’s cycles", "image" : [ "https://media.hubspot.com/hubfs/Imported%20images/TheHustle+HubSpot_Lockup.svg" ], "mainEntityOfPage" : { "@id" : "https://hs-sbup.thehustle.co/news/05062022-morgans-musings", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject" } } } ``` ```json { "@context" : "https://schema.org", "@id" : "#article", "@type" : "NewsArticle", "author" : { "@type" : "Person", "name" : "Morgan Housel", "url" : "https://hs-sbup.thehustle.co/author/morgan-housel" }, "dateModified" : "2023-10-11T20:06:15+0000", "datePublished" : "2022-05-06T07:55:15+0000", "headline" : "Why investors need to understand the market’s cycles", "image" : [ "https://media.hubspot.com/hubfs/Imported%20images/TheHustle+HubSpot_Lockup.svg" ], "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "height" : 112, "url" : "https://fs.hubspotusercontent00.net/hubfs/53/assets/hubspot.com/web-team/WBZ/Blog%202021/Images/Logos/HubSpot%20Logo%20112X112.svg", "width" : 112 }, "name" : "HubSpot", "sameAs" : [ "https://www.facebook.com/hubspot", "https://twitter.com/hubspot" ], "url" : "https://www.hubspot.com" }, "speakable" : { "@type" : "SpeakableSpecification", "xPath" : [ "//title", "/html/head/meta[@name='description']/@content" ] } } ```