The idea behind the CABB is that governments should aim to run a balanced budget over
the course of the business cycle: surpluses in expansions would offset the deficits incurred during recessions.
That is, the intent is that over
the course of the business cycle, the bulk of the distribution of year - ended inflation outcomes should lie between 2 and 3 per cent, not that the annualised average inflation rate from the start of the business cycle to the end should necessarily lie between 2 and 3.
This approach allows a role for monetary policy in dampening the fluctuations in output over
the course of the business cycle.
This fact usually prevents steel companies from creating inflation - adjusted wealth for shareholders over
the course of the business cycle.
Changes in monetary policy might not do much to raise the economy's «long - term» growth potential, but they certainly affect output and employment over
the course of the business cycle.
His establishing the position that Labour would not run a budget deficit over
the course of the business cycle on current expenditure, but would borrow for investment, was precisely the correct position.
That's smaller than the fluctuation in state spending that occurs over
the course of the business cycle.
The «E» in the PE ratio is also subject to expansion and contraction over
the course of the business cycle.
This portfolio is designed to reflect a globally balanced stock / bond portfolio over
the course of the business cycle, however, there are significant flaws in the current 60/40 which allow some room for improvement.
Our Countercyclical Indexing ™ strategy establishes a portfolio management approach that is more consistent with the way investors actually perceive risk over
the course of the business cycle and increases the probability of improving risk adjusted returns.
This helps to keep the investor's risk profile better aligned with the portfolio's exposure to changing asset class risks over
the course of the business cycle.
Rebalancing a portfolio over
the course of the business cycle is part of any good portfolio plan.
We monitor the portfolio for changes in risk during the business cycle, rebalance and manage the portfolio to ensure it is as efficient as possible over
the course of the business cycle.
Over
the course of the business cycle, however, we hope to generate a risk adjusted return that is superior to a benchmark portfolio.
This approach is designed to smooth out the performance of a portfolio over
the course of the business cycle and match your need for financial stability with the way your portfolio of savings actually performs.
Although the investor's risk profile is generally static over
the course of the business cycle, the investor's portfolio will actually change over the course of the business cycle and expose them to varying degrees of risk.
Our Countercyclical Indexing approach establishes a portfolio management approach that is more consistent with the way investors actually perceive risk over
the course of the business cycle and increases the probability of improving risk adjusted returns.
That is, while your risk profile will remain the same over
the course of the business cycle, the risk exposure will actually change as various asset classes change in price and expose you to different degrees of risk.
Most importantly, Countercyclical Indexing is a low fee and tax efficient form of asset allocation that tries to capture the market return given an appropriate level of risk over
the course of the business cycle.
Therefore, it is logical to rebalance portfolios over
the course of the business cycle to account for these changing risks.