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Financial reporters and market strategists often argue about whether we are \u201cearly-cycle\u201d, \u201cmid-cycle\u201d or \u201clate-cycle\u201d.\xa0 However, these perspectives are based on an outdated model of how the U.S. economy behaves.\xa0 In a pure \u201cbusiness-cycle\u201d paradigm, the U.S. economy would, today, be in the late innings of an economic expansion that must naturally end rather soon.\xa0 However, a more realistic model of today\u2019s economy suggests that this expansion could continue for some time more and that, when it ends, it will be because of some financial, environmental or geopolitical shock rather than the inevitable result of the age and stage of the expansion.\xa0 This doesn\u2019t negate the need for diversification.\xa0 However, it does suggest that a portfolio should be stress-tested mostly against how it would react to a downturn triggered by non-economic shocks.