The Definition of a Business Cycle
Over time an economy will grow and shrink. That growing and shrinking sequence will then repeat itself ad infinitum. That cycle is called the Business Cycle. There are four main stages of the Business Cycle, which are Expansion, Peak, Contraction, and Trough.
Expansion as the name implies is a growing economy. During this time GDP is growing, unemployment is falling, etc. People’s optimism about the future is growing very day. Therefore, people will bid up stock prices much higher as they expect the companies to make a lot of money in the favorable business environment.
Peak refers to an economy that is at the end of the expansion. GDP value and unemployment values are very favorable but are not changing in either direction. Similarly, all the people who had the inclination to bid up stock prices have already done so, therefore stock prices (while high) are not getting any higher.
Contraction is a shrinking economy. During this time GDP is shrinking, unemployment is rising, etc. People’s pessimism about the future is growing very day. Therefore, people will force stock prices much lower (via selling) as they expect the companies to lose money in the bad business environment.
Trough refers to an economy that is at the end of the Contraction. GDP value and unemployment values are very bad but are not changing in either direction. Similarly, all the people who had the inclination to sell and thus force down stock prices have already done so, therefore stock prices (while low) are not getting any lower. After the trough is another expansion and the cycle continues.
Investment Fee Structure
|Rate||Assets Under Management|
|1.00%||Between $125,000 and $750,000|
|.85%||Between $750,000 and $1,250,000|
|.80%||Between $1,250,000 and $1,750,000|
|.75%||Between $1,750,000 and $2,500,000|
|.70%||Between $2,500,000 and $3,250,000|
|.65%||Between $3,250,000 and $4,250,000|
A single rate is applied to the entire account. So a person with a $750,000.01 account pays less than a person with a $750,000 account. I will waive personal tax return fees for accounts over $1 million. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.
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Questions for the comments
Did my explanation make sense? Do you agree or disagree with what I said?