1, recovery stage: at this stage, because stocks are more elastic to the economy, they have obvious excess returns compared with bonds and cash;

2. Overheating stage: At this stage, rising inflation increases the opportunity cost of holding cash, and the possible interest rate hike policy reduces the attractiveness of bonds.

3. Stagflation stage: In stagflation stage, the cash yield rises, and it is wisest to hold cash. The impact of economic downturn on corporate profits will have a negative impact on stocks, and the yield of bonds relative to stocks will increase.

4. Recession stage: During the recession stage, inflationary pressure decreased, monetary policy was loose, and bonds performed most prominently. With the expectation that the economy is about to bottom out, the attractiveness of stocks is gradually increasing.

Limitations:

1, it is not easy to predict the economic cycle. Some people say that economics is a rearview mirror, which can see the rear, but can't see the road ahead. When everyone reaches a consensus on the stage of the economy, the corresponding asset prices have often risen a lot.

2. Policy intervention may cause the clock to reverse or jump. Therefore, investors can refer to Merrill Lynch clock when making specific investments, but they should also combine the actual situation.