Which stocks are cyclical stocks?

Cyclical stocks include stocks in basic bulk raw materials industries such as steel, nonferrous metals, chemicals and building materials industries such as cement, construction machinery, machine tools, heavy trucks, equipment manufacturing and other capital-intensive industries.

Because the demand of these industries will be quite high when the economy is booming and the company's operating conditions will be quite good, stocks will also be sought after by many investors, and they will be extremely strong from then on, but the opposite is true when the economy is depressed.

In addition, stocks of consumer goods such as automobiles, high-end liquor, high-end clothing, luxury goods, aviation and hotels. It is also a cyclical stock. When the economy is strong, people's income will naturally increase, and the demand for consumer goods will also rise. The share prices of these industries will definitely strengthen.

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Reasons for regular inventory

Most companies will be affected by the economic cycle, which is also the fundamental reason for the formation of bull market and bear market. Therefore, the key to investing in cyclical industry stocks is to accurately grasp the opportunity. If you can get involved before the bottom of the cycle, you will get the richest return on investment.

But if you buy at the wrong time and place, for example, when the cycle reaches the top, you will suffer serious losses, and it may take five years or even 10 years to usher in the recovery and upsurge of the next cycle.