Service Navigation

Cyclical stocks

Cyclical stocks Stocks that are especially sensitive to economic cycles.

The return on a cyclical stock fluctuates considerably over relatively short periods of time because it is tied to the state of a sector or an economy. Thus, it is difficult to predict how cyclical stocks will perform over the long term.

An example of a cyclical stock is a company that produces consumer goods. A downturn in the economy, which goes hand in hand with a lower demand for consumer goods, will impact the earnings situation of this company.

Related topics

Worth knowing?

Consult the glossary for another term.