Apr 12, 2023
Cyclical stocks are the ones whose fortunes are linked to the state of the economy or the business. Trading in such stocks is primarily triggered when the business cycles are down. Here’s how famed investor Peter Lynch views cyclical stocks:
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As per the investor, cyclicals are companies or businesses whose revenues and profits are in sync with the state of the economy and their performances depend on the business cycle.
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The best time to bet on cyclicals is when the economy is slowing, earnings are weakest and public sentiment is also at its worst.
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“Cyclicals are like blackjack: stay in the game too long and it’s bound to take back all your profit,” says Peter Lynch.
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Cyclicals can be a good bet for a highly aggressive investor class seeking high rewards, who can time the market well and make a quick decision to book profits at the right time
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