Mr. Money Mustache has an article about how to prosper in booms and busts that is interesting. I'll note a couple disagreements.
In booms he suggests:
- Ratchet up your job.
- Earn more and save everything you can. Crap is overpriced now, so don't buy much. Downsize your house or move to a rental.
- Reduce exposure to equities and buy more bonds. I don't agree with this, at least with regards to our current "boom". Interest rates are far too low to buy bonds now.
And in busts:
- Basically hunker down in your job and be glad that you didn't overspend during the boom times.
- Upsize your house, if desired. Buy rental property.
- Buy all the equities you can.
Overall these are good tips, at least if you're planning to make it to the next end of the cycle. One of the main components that MMM neglects is the effect of inflation. Inflation and interest rates are often not cyclical with booms and busts, and they can complicate all your rules-of-thumb.