When working with investing clients, I frequently used the Pendulum Model to discuss the stock market and economics. It’s a very simple mental model for thinking about the cyclical nature of systems. But I find it very helpful. Recently there has been lots of talk about inflation, economic growth, and interest rates. I think this simple model can help think about these situations. Imagine a simple pendulum like you might find in a grandfather clock. If you graphed its movement over time, it might look something like this:
The Pendulum Model
The Pendulum Model
The Pendulum Model
When working with investing clients, I frequently used the Pendulum Model to discuss the stock market and economics. It’s a very simple mental model for thinking about the cyclical nature of systems. But I find it very helpful. Recently there has been lots of talk about inflation, economic growth, and interest rates. I think this simple model can help think about these situations. Imagine a simple pendulum like you might find in a grandfather clock. If you graphed its movement over time, it might look something like this: