How to Profit from Bull-Bear Cycles – Warren H. Lau’s Cycle-Based Investing Strategy for Creators
- Kaelen Vance
- Jan 15
- 5 min read
by Kaelen Vance
For Freelance authors, graphic designers, and creative entrepreneurs, market volatility often feels like a threat to financial stability. Irregular income streams, tight budgets, and limited time for investing mean we can’t afford to get caught on the wrong side of a bull or bear market. But what if volatility wasn’t a risk—it was an opportunity?
Warren H. Lau, Chief Editor of INPress International and a veteran private investor with 15+ years of experience, has built his personal portfolio’s success on decoding market cycles. Over two of the 21st century’s most turbulent periods, he grew his holdings by 600% during the 2008 Subprime Crisis (vs. the S&P 500’s 26% return) and 320% through the 2015 Chinese Market Crash (vs. the CSI 300’s -18% decline). His secret? A "cycle-based investing" framework that blends technical analysis, market sentiment, and news-driven decision-making—one he details in his book The Alchemy of Investment: Bull-Bear Cycles, Market Sentiments, and News-Based Trading.
For creators, this strategy is a game-changer: it’s low-maintenance, prioritizes risk mitigation, and fits with irregular cash flow. Below is a breakdown of Warren’s core cycle-based principles, tailored to the unique needs of creative professionals.
The "Cycle Confirmation Matrix" – Warren’s Tool for Spotting Market Shifts
The biggest mistake creators make with investing is reacting to market swings instead of anticipating them. Warren’s "Cycle Confirmation Matrix"—a cornerstone of The Alchemy of Investment—fixes this by identifying early signals of bull-to-bear or bear-to-bull shifts using three verifiable data points:
1. Technical Signals (Chart Patterns for Beginners)
You don’t need to be a Wall Street analyst to read key technical indicators. Warren simplifies it for creators: focus on two metrics:
Moving Averages: When the 50-day moving average crosses above the 200-day moving average (the "golden cross"), it’s a bullish signal (markets are likely to rise). When it crosses below (the "death cross"), it’s bearish (prepare to defend capital).
Volume Spikes: A sudden surge in trading volume (2x the average) often precedes a cycle shift. For example, during the 2015 Chinese crash, Warren noticed volume spikes in defensive stocks (e.g., utilities) and reallocated his portfolio—avoiding the 18% CSI 300 decline.
Creator Tip: Use free tools like Yahoo Finance or Robinhood to track these indicators—set up email alerts for golden/death crosses so you don’t have to monitor charts daily.
2. Market Sentiment (Read the "Crowd" Without the Hype)
Creators are experts at reading emotions—and that skill translates directly to market sentiment. Warren teaches that sentiment, not just data, drives cycles:
Fear & Greed Index: A scale of 0–100 (0 = extreme fear, 100 = extreme greed). When it hits 20 or below (extreme fear), bear markets are often near bottom (buying opportunity). When it hits 80 or above (extreme greed), bull markets may be overextended (sell or reduce risk).
Social Media & Analyst Reports: Look for patterns—if every finance influencer is hyping tech stocks (greed) or panicking about a crash (fear), it’s a signal to act contrarily. Warren used this during the 2008 crisis: while analysts warned of "permanent market damage," he bought undervalued dividend stocks (fear = opportunity).
Creator Tip: Follow 2–3 trusted finance accounts (not influencers) on LinkedIn/Twitter—too many voices lead to emotional decision-making. Warren recommends focusing on data-driven accounts like Bloomberg or The Wall Street Journal’s Markets team.
3. News-Driven Triggers (Filter Noise for Actionable Insights)
Not all news moves markets—and creators don’t have time to sift through headlines. Warren’s 3-step news filter (from The Alchemy of Investment) helps prioritize what matters:
Impact: Does the news affect the entire market (e.g., Fed interest rate hikes) or just one sector (e.g., a tech company’s product launch)? Market-wide news drives cycles; sector-specific news is noise.
Timing: Is the news immediate (e.g., a geopolitical event) or long-term (e.g., a new climate policy)? Immediate news causes short-term swings; long-term news shapes cycles.
Sentiment Alignment: Does the news confirm or contradict the technical/sentiment signals? For example, a Fed rate cut (bullish news) paired with a golden cross (bullish technical) is a strong cycle-shift signal.
Creator Tip: Set up Google Alerts for "Fed policy," "global market cycles," and "inflation data"—these are the top news drivers of bull/bear shifts. Check alerts once a week (not daily) to avoid overreacting.
Creator-Friendly Cycle-Based Portfolio Allocation
Warren’s strategy isn’t just theoretical—it’s built for flexibility, which creators need. Here’s how to adapt it to irregular income:
Bear Market (Defensive Positioning)
60% High-Yield Savings Account (HYSA) + Short-Term Bonds: Protect capital during volatility.
30% Defensive Stocks/ETFs: Utilities, consumer staples (e.g., Coca-Cola), or dividend ETFs (VIG) — these hold value during downturns.
10% Cash: Ready to buy undervalued assets when fear peaks.
Bull Market (Growth Positioning)
50% Broad-Market Index Funds/ETFs: S&P 500 (VOO) or total market ETFs (VTI) — capture overall market growth.
30% Sector ETFs: Tech (XLK) or consumer discretionary (XLY) — sectors that outperform in bull markets.
15% Dividend Stocks: Balance growth with passive income (critical for irregular cash flow).
5% Cash: Avoid overexposure if the cycle shifts suddenly.
Creator Tip: Reallocate quarterly (not monthly) to align with cash flow. For example, if you receive a book advance in Q2 (bull market), add to index funds—if Q4 is slow (bear market), shift to bonds/HYSA.
Why This Works for Creators (Warren’s Track Record Speaks for Itself)
What sets Warren’s framework apart is its real-world proof. His personal portfolio’s 22% average annual return (2015–2022) wasn’t luck—it was discipline. In The Alchemy of Investment, he shares case studies from his own journey, including:
How his focus on central bank liquidity tools (e.g., Fed interest rate adjustments, PBoC reserve requirement ratios) guided strategic asset reallocation during the 2015 Chinese market downturn—leveraging policy-driven market inefficiencies to grow a targeted investment through disciplined, long-term compounding by 2022.
How the book’s Cycle Confirmation Matrix (technical signals + central bank policy cues + news sentiment) identified early bear market triggers ahead of the 2020 COVID crash—enabling proactive shifts to defensive assets (e.g., government bonds, consumer staples) that preserved capital amid widespread volatility, consistent with the book’s emphasis on risk mitigation.
How freelance authors and creative entrepreneurs applying the book’s low-maintenance, news-driven strategies have built sustainable passive income—aligning investments with their irregular cash flows by prioritizing policy-backed assets (e.g., dividend ETFs, short-term bonds) and avoiding active trading, as outlined in the book’s creator-centric guidance.
For creators, this isn’t just investing—it’s financial freedom. Warren’s framework lets you grow wealth without sacrificing time for creative work, and it aligns with the flexibility of irregular income. As he writes in The Alchemy of Investment, "Market cycles are inevitable—but being on the right side of them is a choice."
Editor’s Note: Warren H. Lau is Chief Editor of INPress International, Era-zine’s sister book publisher. This article is editorial content and does not promote any INPress products. All investment strategies carry risk—past performance is not indicative of future results. Consult a financial advisor before making investment decisions.
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