Investment cycles and asset allocation

Asset allocation involves essential decisions for all investors, whether they are professional or private individuals. But how can investors be sure they make these decisions in an objective manner? While there isn't a single answer to this question, understanding the history of the financial markets is key, as it allows us to consider both short and long timeframes. Analysing financial data from nearly a dozen countries going back to the beginnings of industrialisation, the author proposes a cyclical framework for understanding the financial markets: specifically, long cycles of a duration of approximately 50 years and short cycles primarily tied to current events. The work is divided into three chapters: The first chapter deals with long cycles and highlights the behaviour of assets during each phase in line with economic and demographic factors. The second chapter reviews short cycles, detailing their recurrent patterns, especially in response to moves by central banks. Finally, the third chapter proposes asset allocation strategies that would have preserved long-term purchasing power based on the preceding observations.