investing guide

What Are Cyclical Stocks - Following Current Economic Trends

cyclical stocks

So what in the heck are the financial people talking about when they mention cyclical stocks?

These are stocks that generally follow the current economic times. An example of this type of stock sector would be the automotive industry. When economic times are good people tend to want to spend more money on things such as automobiles. However, when times get rough people want to sock their money away which causes problems for cyclical stocks.

An example of a non-cyclical stock would be healthcare stocks. This is because regardless of economic conditions healthcare is always needed by consumers.