Kondratieff Wave

The Kondratieff Wave, also known as K-wave or long wave, is a cycle-like phenomenon affecting all markets, that was described by economist Nikolai Kondratieff a century ago. He found periods of evolution and self-correction in capitalist economies that were part of a regular, sinusoidal cycle. The waves can last between 45 to 60 years and consist of 3 phases that are repetitive in nature: expansion, stagnation, and recession. These phases come with social shifts and mood changes, which influence the actions of individuals involved in the world economy and account for high-growth and low-growth periods.

This theory was refined over the years and stood the test of time. Each Kondratieff Wave corresponds with a period of enormous change with new industries replacing old ones and new professions emerging. It is widely believed that we are currently in the 5th Wave, mainly driven by information and communication technology. Investors are trying to identify the beginning of the 6th Wave, based on characteristics listed by Kondratieff, to ride it upwards.