There are certainly economic theories that account for business cycles. Keynes’s General Theory of Employment, Interest, and Money is the go-to book here.
If you expect the market to fall, you would want a short position. If the market continues to rise, that bet will lose lots of money. A bet against the market has to be very well timed, and that’s very hard to do. As the saying goes, the market can stay irrational longer than any investor can stay solvent.
There are certainly economic theories that account for business cycles. Keynes’s General Theory of Employment, Interest, and Money is the go-to book here.
If you expect the market to fall, you would want a short position. If the market continues to rise, that bet will lose lots of money. A bet against the market has to be very well timed, and that’s very hard to do. As the saying goes, the market can stay irrational longer than any investor can stay solvent.