The business cycle refers to the recurring pattern of economic expansion and contraction — much like the four seasons in nature!
It consists of four stages:
1. Recovery: The economy begins to rebound
2. Expansion: Conditions continue to improve
3. Slowdown: Growth momentum fades
4. Recession: The economy contracts noticeably
A full business cycle can last anywhere from 3–4 years to 10–20+ years. Understanding the cycle helps you make better-informed investment decisions at each stage.
To learn more, check out MM's courses or explore the macro overview.