cyclical stock

Definition

The stock of a company which is sensitive to business cycles and whose performance is strongly tied to the overall economy. Cyclical companies tend to make products or provide services that are in lower demand during downturns in the economy and higher demand during upswings. Examples include the automobile, steel, and housing industries. The stock price of a cyclical company will often rise just before an economic upturn begins, and fall just before a downturn begins. Investors in cyclical stocks try to make the largest gains by buying the stock at the bottom of a business cycle, just before a turnaround begins.
opposite of defensive stock.

Use cyclical stock in a sentence

They had a cyclical stock and that was very good for them and I was very happy with what they were doing.

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You should always know that a cyclical stock will have many ups and downs and be patient with them if you can take it.

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He agreed to purchase the cyclical stock despite the fact that the market had just reached a high point and was likely to begin falling in the near future.

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cyclical risk non-cyclical stock