What all investors should know to choose between Cyclical vs Defensive stocks?

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The equity markets are abuzz with exciting opportunities. But investors must understand the dynamics of the markets to make better investment choices. It is critical to find right stocks to earn steady long-term return with minimum risks. You must know which stocks are good for investment and which are suitable for generating long-term profit. Simply following what others are planning can be detrimental to your interests.
Cyclical stocks represent the companies that follow the trends in the overall economy. The prices of cyclical stocks surge with a rise in economy and vice versa. Cyclical stocks are known to follow all cycles of economy, right from expansion, peak to recession and recovery.
Defensive or non-cyclical stocks generally outperform the market when there is an economic slowdown. These companies are generally profitable since they produce goods and items which are consumed throughout the year.
On the other hand, the reason defensive stocks are named ‘defensive’ because they defend investors against the negative impact of economic slowdown. Smart investors invest in these stocks when the economic outlook is not so bright.

#equitymarkets #cyclicalstocks #economic #kalkinemedia

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Again, very informative stuff.-Thanks

Selwynable