Theoretically then, as an investor, therefore, being
long of cyclical stocks when the economy is picking up and as it is growing will lead to profitable investment as shares prices rise.
Not exact matches
World growth will remain low on average but negative in the UK and Europe; price inflation will remain sufficiently subdued for a while
longer so as to impose no constraint on monetary expansion; central banks will sustain a regime
of negative real interest rates and rapid monetary expansion; the risk
of a eurozone collapse is off the table for now; finally,
stock markets should continue to perform better than expected, even though the four - year old
cyclical bull market is
long by historical standards.
In the year -
long rally beginning in March
of 2003
cyclical stocks were up 63 percent, while the market rose 35 percent (after two and half years
of relentless losses).
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.
What drives the major
cyclical swings in
stocks isn't variation in the
long - term stream
of cash flows investors are likely to receive.
With any industrial name that you plan to hold
long term you have to expect both boom and bust cycles as that's the nature
of cyclical stocks.
It also stated that it would stay away from
cyclical stocks or mid cap
stocks to reduce the risk
of the portfolio and increase chances
of positive returns over the
long term.
The
stock market is
cyclical, it will keep having highs & lows but in the
long term (10 years or more) the returns have been almost similar despite the market condition at the time
of making the investment.
We define
cyclical stocks as companies that may achieve an above - average
long - term record
of earnings growth; however, the achievement
of this growth often occurs in fits and starts.