August 18, 2017
The first total solar eclipse visible in the U.S. in nearly four decades is happening on Monday, August 21. Only 1 in 1,000 people have ever seen a total solar eclipse and the last time this happened, Jimmy Carter was in office. During most solar eclipses, the moon takes just a “bite” out of the sun – these are called partial solar eclipses. However, the event on Monday will go down as the first total solar eclipse whose path of totality stays completely in the United States since 1776. During the so-called Great American Total Solar Eclipse, the 70-mile-wide shadow cast by the moon will darken skies from Oregon to South Carolina.
While Charlotte, North Carolina may not be in the “Path of Totality,” we’ll experience right around 97-98% coverage of the sun. We’re also close to places that are set to experience a total blackout for roughly two minutes.
So what can the solar eclipse teach us about markets?
- There is a Cycle
- The Current Cycle Doesn’t Last Forever
- Don’t Let Your Emotions Blind You
1. There is a Cycle
Just as there is a schedule established for the location and time of eclipses, there are business cycles as well. The business cycle consists of four phases:
- Expansion– a period of economic increase or positive growth
- Peak– the highest turning point of a business cycle
- Contraction– a period of economic decline or negative growth
- Trough– the lowest turning point of a business cycle