The Fourth Turning

📚 arvy's Book Club

arvy's Teaser: Why do major crises seem to arrive every 80 years — the American Revolution, the Civil War, World War II, and now? Strauss & Howe argue it's not coincidence: history moves in predictable generational cycles, and we're currently in the most dangerous phase. Controversial, sweeping, and eerily prescient — here's what their theory means for investors navigating the 2020s.

The Book in 60 Seconds

The Fourth Turning (1997) by William Strauss and Neil Howe presents a theory of cyclical history. Every roughly 80–100 years, Western societies move through four phases ("turnings"): a High (post-crisis rebuilding), an Awakening (cultural rebellion), an Unravelling (institutional decay), and a Crisis (existential upheaval). The authors predicted in 1997 that a major crisis would begin around 2005–2008 and peak around 2020–2025. Whatever you think of the theory — the timing has been uncanny.

William Strauss & Neil Howe · 1997 · History, Cycles & Investing
Updated: The Fourth Turning Is Here (Neil Howe, 2023)

Idea 1: History Doesn't Repeat — But It Rhymes in 80-Year Cycles

Strauss & Howe's core thesis: history isn't linear progress or random chaos. It's cyclical — driven by the predictable ageing of four generational archetypes (Prophet, Nomad, Hero, Artist), each shaped by the turning they grew up in.

The pattern repeats with eerie consistency:

The gap between each crisis? Roughly 80 years — one full human lifespan. By the time the next crisis arrives, everyone who lived through the last one is gone. Society has to re-learn the hard way.

Idea 2: Fourth Turnings Destroy Institutions — Then Rebuild Better Ones

The scariest (and most hopeful) idea: Fourth Turnings aren't just crises. They're the furnace in which old, broken institutions are melted down and recast.

During the Unravelling (the phase before the crisis), society loses faith in institutions: governments, banks, media, education. Trust erodes. Individualism peaks. Problems pile up unsolved. Then the crisis hits — and forces collective action. Not because people want to cooperate, but because they have no choice.

The 2008 financial crisis, Covid-19, the energy crisis, rising geopolitical tensions, AI disruption — Strauss & Howe would say these aren't separate events. They're symptoms of one underlying cycle: the old order is failing, and the new one hasn't been built yet.

Every Fourth Turning in history looked like the end of the world to those living through it. Every one of them produced the institutional foundations for the next 60 years of growth.

Idea 3: Generational Psychology Drives Markets — Not Just Economics

Perhaps the most underappreciated idea: each generation's risk appetite, spending patterns, and institutional trust are predictable — because they're shaped by the turning they grew up in.

The "Hero" generation (born during an Unravelling, coming of age during the Crisis) tends to be community-oriented, institution-building, and willing to sacrifice individually for collective goals. Think: the GI Generation that won WWII and built the post-war middle class. Today's equivalent? Millennials and early Gen Z.

This has profound market implications. As the Hero generation enters its peak earning years (roughly 2025–2045), their values — sustainability, technology, equity — will reshape which companies, sectors, and business models succeed.

What This Means for Swiss Investors

Switzerland has its own unique relationship with Fourth Turnings. While other nations were devastated by the 1940s crisis, Switzerland navigated it through neutrality — damaged but intact. The same may be true of the current cycle.

arvy's Take

What holds up: The timing has been eerily accurate. Written in 1997, the book predicted a major crisis beginning around 2005–2008 and peaking around 2020–2025. The financial crisis, pandemic, political polarisation, and geopolitical fragmentation all fit the framework. As a mental model for understanding why the world feels so unstable right now, the Fourth Turning is invaluable.

What's missing: The theory is broad enough to be unfalsifiable — which is its greatest strength and greatest weakness. You can fit almost any event into the framework after the fact. The generational archetypes are painted with a very wide brush. And the US-centric focus means it doesn't fully account for Switzerland, Asia, or the Global South.

What we'd add: Use the Fourth Turning as a framework for temperament, not a trading signal. It doesn't tell you when to buy or sell. But it does tell you this: if you're investing during a crisis period, you're investing at exactly the right time historically. Every previous Fourth Turning was followed by the longest and strongest bull markets in history. Stay the course.

3 Sentences to Remember

1. History moves in ~80-year cycles. We're in the crisis phase — and it will end.

2. Fourth Turnings destroy old institutions and build new ones. The chaos is the construction process.

3. Every crisis in history was followed by a boom. The investors who stayed invested through the worst reaped the most.

Buy the book

English (Amazon) · Deutsch (Amazon)

Also in Book Club: Tim Marshall's Geography Trilogy → · Engines That Move Markets →

This article was written by Thierry Borgeat, Co-Founder of arvy, and reviewed by Patrick Rissi, CFA, and Florian Jauch, CFA.

Disclaimer: This article is for general informational purposes only and does not constitute personal investment advice. Amazon links are affiliate links. arvy is a FINMA-supervised asset manager.