Cyclical stocks

Stocks that are especially sensitive to economic cycles.

The return on a cyclical stock fluctuates considerably over relatively short periods of time because it is tied to the state of a sector or an economy. Thus, it is difficult to predict how cyclical stocks will perform over the long term.

An example of a cyclical stock is a company that produces consumer goods. A downturn in the economy, which goes hand in hand with a lower demand for consumer goods, will impact the earnings situation of this company.

Our glossary explains important financial terms and should not leave any questions unanswered. However, if you are missing a definition, please write to us at We will then include the term if possible.