The stock plunge is occurring
during an upswing in the economy with the unemployment rate at 4.1 percent.
From the perspective of the wider economy, this cycle resembles Schumpeter's process of «creative destruction» — as the function of the bust, which follows the boom, is to clear away the misallocation of capital that has
occurred during the upswing.
But because their assets tend to perform better during better economic times, these stocks often see higher returns than other parts of the
market during upswings, says Stammers.
In contrast, it may be more helpful to think of risk as
increasing during upswings, as financial imbalances build up, and materializing in recessions.»
The underlying index for the iShares Edge MSCI Min Vol EAFE Index ETF (XMI) has historically lost less during market declines, while still capturing meaningful
gains during upswings, according to Morningstar data.
They tend to outperform cyclical stocks in hard times, but they usually are not the stocks of
choice during the upswings in the business cycle.
The space was
rented during an upswing in the art market, and measured 4,800 square feet, quadruple the size of the previous location.
You Survive the Next Downturn Now, (ULI, Oct. 14, 2013)-- Real estate leaders explain how they
manage during the upswings — so they can better withstand the inevitable downturns.