In Chinese philosophy, the five elements provide a basic framework to understand relationships. Each year, wood, fire, earth, metal and water dance around each other, some ruling throughout, others bursting out for a month or so. A Feng Shui master will assess the relative strengths of each element at any given time. We apply Feng Shui theory to the markets by assigning certain industries to each element to determine their general trajectory. Portfolios perform best when the elements are equally weighted, so you can adjust your investments to get the best possible results. Remember, wood fuels fire; fire makes earth; metal comes from the earth and produces water, a fundamental ingredient for life. Conversely, water puts out fire; fire melts metal, making it weak; metal can cut through wood; and wood overcomes earth as roots grow down into the soil; and earth overcomes water.