What are the cyclical industries?

The economic operation of a country is cyclical, that is, recovery, prosperity, recession and depression, and some industries are inseparable from the economic cycle. In stock market investment, especially in medium and long-term investment, it is very beneficial to long-term investment if we can grasp the development trend of cyclical industries.

What are the cyclical industries?

Typical cyclical industries include steel, coal and other commodity industries, as well as construction machinery and shipbuilding industries. It is not difficult to understand that steel and construction machinery represent engineering construction, coal represents power generation and ships represent terms of trade. As the economy moves from recovery to prosperity, these industries are often on the rise, and vice versa.

How to invest in cyclical industries? We should not only pay attention to the timing, but also choose the right way.

Timing: Although cyclical industries are highly correlated with the economy and seem easy to predict, don't always think about bargain hunting. Waiting for the bottom to appear will miss many buying opportunities. Appropriate risk-taking is the premise to improve the profit probability. In fact, the trend of the stock market is often ahead of the economy, so be prepared to buy in advance. In addition, when the national economy slows down to a certain extent, it is often accompanied by the introduction of government stimulus plans, so we can also pay attention to various meetings and track the purchase of key information.

Mode: In addition to buying related stocks, you can also make layout by buying industry theme funds, which can avoid the trouble of stock selection. Although the performance may not be as good as individual stocks, the risk is lower than that of individual stocks.