In economic terms, cyclical stocks are stocks whose price is affected by macroeconomic changes. These stocks follow an economy’s expansions, peaks, recessions, and recoveries. The majority of cyclical stocks are companies that sell consumer goods, such as clothes and electronics, which consumers buy more during times of economic boom and spend less during times of recession.
Investors buy these stocks at the low point of a business cycle and sell them when the cycle reaches its peak.[Read more…] about What Are Cyclical Stocks?