The decline of stocks in the financials sector during the financial crisis once again demonstrated how stocks in the same sector often exhibit similar performance during a
particular phase of the business cycle.
The performance of economically sensitive assets such as stocks tends to be the strongest during the early
phase of the business cycle when growth is rising at an accelerating rate, then moderates through the other phases until returns generally decline during a recession.
Economist Lakshman Achuthan, a principal of the Economic Cycle Research Institute, sees «an
accelerating phase of the business cycle, something that we predicted last November when many were still clinging to double - dip recession fears.»
This portfolio invests in a globally diversified set of low fee index funds that are designed to be overweight stocks during the business cycle's expansion phases with a reduced overweight to stock market risk during the
contraction phase of the business cycle.
Full - Phase Average Performance Calculates the (geometric) average performance of a sector in a
particular phase of the business cycle and subtracts the performance of the broader equity market.
You will find expertise in areas you need, as well as quick advice from entrepreneurs just ahead of you in
every phase of the business cycle.
A phase of the business cycle characterized by increasing corporate profits and hence increasing share prices, an increase in the demand for capital for business expansion, and hence an increase in interest rates.
Full - Phase Average Performance Calculates the (geometric) average performance of a sector in a particular
phase of the business cycle and subtracts the performance of the broader equity market.
The strategy calls for increasing allocations to sectors that are expected to prosper during
each phase of the business cycle while under allocating to sectors or industries that are expected to underperform.
Depending on
the phase of the business cycle — early, mid, late, or recession — certain sectors may be expected to outperform others.
With an understanding of how certain sectors have typically performed during
each phase of the business cycle, you may be able to position your portfolio optimally.
Sector rotation strategies may help you align your portfolio with your market outlook and the different
phases of the business cycle.
However, the stock market is made up of companies from many sectors which rotate in and out of favour during
the phases of the business cycle.
At Eversheds Sutherland, our international shipping and trade disputes lawyers serve clients through
every phase of the business cycle, and can help you find a fresh perspective on every dispute, crisis, contract and negotiation.
An overview of the American economy will be explored through a study of basic supply and demand analysis and a review of fiscal and monetary policy to
phases of the business cycle.