When the market is low in its cycle, gains are more likely than usual, and losses are less likely. The reverse is true when the market is high in its cycle. Positioning moves, based on where you believe the market stands in its cycle, amount to trying to better prepare your portfolio for the events that lie ahead. While you can always be unlucky regarding the relationship between what logically should happen and what actually does happen, good positioning decisions can increase the chance that the market’s tendency — and thus the chance for outperformance — will be on your side. (See here)
