The presidential cycle has become such an accepted indicator that the Canadian research department of the giant Swiss bank UBS has begun advising clients to tilt towards stocks — especially
cyclical stocks such as metals, minerals, oil and gas — in year three of the cycle.
Not exact matches
Generally, it's the more growth - focused areas,
such as emerging markets, small caps and
cyclical stocks,
such as industrials, that get hit the hardest when a market falls.
It is altogether possible that we can have a
cyclical downturn in the U.S. economy by early 2019, and a
cyclical bear market in
stocks this year, anticipating
such a development.
From our perspective,
stocks in less
cyclical sectors,
such as utilities and consumer staples, generally offered much less value and appeared to be trading at steep valuations.
Higher oil prices would reinforce current market trends based on reflation: rising long - term bond yields and a shift out of perceived safer assets — bond proxies and low - volatility
stocks — and into
cyclical assets
such as EM.
Cyclical and high - volatility
stocks such as technology, industrials and materials will benefit most, says Charles Lewis Sizemore, founder of Sizemore Capital in Dallas.
When the economy is expanding, earnings tend to grow across the market and in
such an environment, investors historically could purchase value
cyclical stocks at a much more attractive price than evergreen growth
stocks.
You may want to avoid more volatile investments
such as
cyclical stocks, commodities and commodity
stocks, growth
stocks, and high - yield bonds.
As
such, companies with large debt loads and more
cyclical business models usually have more volatile
stocks.
Generally, it's the more growth - focused areas,
such as emerging markets, small caps and
cyclical stocks,
such as industrials, that get hit the hardest when a market falls.
He also identified
stocks using one of several identifiers
such as: slow growers, fast growers,
cyclicals, turnarounds and stalwarts.
But remember, you are not limited to investing Certificates of Deposit or bonds only, you can make higher risk investments
such as
cyclical stocks, commodities, futures, ETFs, etc..
Debt's far too high, and debt reduction needs to be the primary focus for
such a
cyclical stock (I'm actually disappointed at the recent dividend announcement).
And while dividend
stocks can certainly play a role in your retirement income strategy, loading up on them too much could leave you with a
stock portfolio dangerously skewed to a handful of market sectors,
such as utilities, consumer
cyclicals, financials and real estate.
[I occasionally employ
such a methodology for
cyclical stocks — for example, CPL Resources & CRH.