Cyclical shares

The earnings of cyclical stocks fluctuate over relatively short periods of time depending on the economic cycle of an industry or an entire economy. Typical cyclical stocks are, for example, consumer stocks, automotive stocks or technology stocks. A poor economic situation and the associated low demand for consumer goods have an impact on the earnings situation of these companies. If corporate earnings are hardly affected by economic cycles, these are referred to as countercyclical stocks or sectors. Examples are utilities, pharmaceutical companies and banks.