Investing philosophy: Understand where we are at the market cycle

Recently heard a podcast interviewing Oaktree capital investment chief Howard Marks who wrote a book about market cycle. It is important to know where we stand at current market. The easy money has been made in 2009. Currently we are near end of cycle where making money is tougher with rich valuation at various market. Upside is minimal and downside is plenty. Expected forward returns will be lower than historical average. It is important to manage risk at this point. Opportunity cost is market continue to rise but downside risk is protected and allow us to stay in the game should the market corrected in near or distant future.

Also value investing is suffering a Long run of underperformance compared to growth investing. It maybe demoralizing to see your strategy not performing, but it is important to maintain a consistent strategy and not flip to another strategy that chase the return. A System will not work in all market cycle. Key is to trust ur system that is backed by proven results.