The economy operates in recurring phases of expansion and contraction, known as business cycles or economic cycles. These cycles play a fundamental role in shaping economic activity, employment, and investment decisions. In this article, we will explore the different phases of the business cycle, relate them to the seasons of the year, and discuss how investors...
The business cycle describes how the economy expands and contracts over time. It is an upward and downward movement of the gross domestic product along with its long-term growth rate. The business cycle consists o f 6 phases/stages : 1. Expansion 2. Peak 3. Recession 4. Depression 5. Trough 6. Recovery 1) Expansion : Sectors Affected: Technology, Consumer...
It is important to understand that primary trends of stocks, bonds, and commodities are determined by the attitude of investors during unfolding of events in the business cycle. An understanding of the interrelationship of credit, equity, and commodity markets provides a useful framework for identifying major reversals in each. MARKET MOVEMENTS AND BUSINESS...