A Publication of WTVP

Business activity tends to go in cycles, and under-standing the stages of a business cycle can provide clues that may help you identify favorable investment opportunities. While some stocks tend to be immune to economic swings, others perform better or worse during different stages of the business cycle.

The business cycle can provide insight, but it is important to realize the U.S. economy rarely follows this cycle precisely, and the amount of time spent in each stage of the cycle varies. In addition, the economy does not always expand to its fullest levels, nor does it always dip into recession. It does, however, tend to proceed through six typical stages. Here are some general guidelines to which market sectors are inclined to benefit in each cycle.

While tracking the business cycle can be a useful barometer for investors, keep in mind the business cycle is not precise. In addition, pinpointing particular stages of economic activity is not always easy and even economists do not always agree on exactly where the economy stands in any particular cycle. IBI