What time is it on the real estate market cycle clock? Where are we in the cycle? That question has been coming up a lot lately. Most of the people we’re talking with believe we have now left the high-noon recovery period and are probably somewhere around 15 minutes into the expansion period. (Next phase: oversupply — but that’s still a long way off.)

Each time we enter into a new time or phase on the clock, investors face a whole new array of risks. But how do you best manage those risks?

With respect to risk management, probably as many approaches exist as there are risks. A lot of these are quantitative and, quite frankly, too many of them don’t work very well.

The one that makes the most sense to me — and that has the added advantage of actually working — is Potential Problem Analysis, outlined in Benjamin Tregoe and Charles Kepner’s classic book on process management tools, The New Rational Manager.

The process starts by identi