Economic Cycles

For some, this economy is “the best of times”; for others, it is “the worst of times.” Wall Street has gone from the “season of light” to the “season of darkness.” In the midst of the current economic uncertainty, there are those who look to the future with great trepidation. For them, it is the “winter of despair.” Others look to the future through the eyes of an optimist. For them, it is the “spring of hope.”

That some people are able to maintain a positive focus and perform admirably and successfully, regardless of the conditions that surround their efforts, has always fascinated me. Faced with identical circumstances, some people rise to the challenge, tapping into the best of themselves, and achieving what other can’t even imagine. Consider this: In tough times, 25 percent of businesses fail, 70 percent survive, and 5 percent thrive.

On a broader scale, some people play the cards they are dealt while other people fold em’ and go home. Some people thrive on the challenge; others wilt in the heart of the battle. The resilience of the human spirit is nature’s way of equipping us with the fuel we need to soar above whatever obstacles we encounter.

Since 1854, we have experienced 33 economic downturns in the U.S., each lasting about one and one-half years, followed by an expansion of about three years. It seems we’ve discovered a way to handle these downturns more effectively over the past 60 years. Since 1948, we have had 10 recessions; the average contraction is 11 months, and the average expansion is four years. We spend 80 percent of our time in good economic times. If you work in business long enough, you will experience a downturn.
What’s the point? Economic nirvana is always followed by economic nervousness that is always followed by nirvana which is always followed by nervousness. It’s a cycle. The most important thing to know about tough times is that they pass and are replaced by good times. Businesspeople who wring their hands today will ring their cash registers tomorrow. Tough times? This too will pass.

(This article was written by Tom Reilly)

Economic Cycles   Source: Investopedia