Under normal circumstances, the stocks of these cyclical industries will grow with the development of market economy, which will make the market demand of products in these industries increase rapidly, and will also effectively and quickly improve the performance and stock price of individual stocks in these industries. On the contrary, when the market economy is declining or depressed, the market demand for products in these industries drops rapidly, which leads to the rapid decline of individual stock performance and stock price in the industry. Therefore, the cyclical stock industry has a strong binding with the trend of market economy, and has a certain early response.
Under normal circumstances, when the market economy is in the initial recovery stage, basic industries such as nonferrous metals, construction, paper making and steel will take precedence over other cyclical stocks, reflecting the market rise in advance. Then, when there is an obvious growth stage in the market economy, capital-intensive industries such as general machinery industry, industrial machinery industry, electronics industry and production development-oriented industries will stand out. Then when the market economy reaches its peak, it will promote high-consumption industries such as automobile industry, wine-making industry, tourism industry, hotel industry and luxury goods, which shows that the market economy is in a high stage.
How to distinguish cyclical stocks from growth stocks
1, the stock price varies.
2. Dividend distribution is different.
3. Different industries
4. Investors have different preferences.
Cyclical stocks generally belong to basic bulk raw material industries such as nonferrous metals, steel and chemicals, and fluctuate with the economic cycle. When the economy grows at a high speed, the market demand for products in these industries increases, which stimulates the stock price to rise. When the economy is depressed, the demand for products in these industries decreases, and the stock price falls accordingly; Futures stocks generally have higher dividends, mostly investment stocks, which are deeply loved by short-term investors.
Growth stocks are mainly stocks issued by companies in a rapid development stage. Generally, these companies belong to emerging industries such as new materials and new energy, and have great development potential. In the early stage of development, the stock yield is low and the stock price is low; The profits of growth stock companies reach a new peak in the rising period of each economic cycle, which is higher every time; The company's capital profit is generally used to build positions, increase scientific research and other production activities to expand the scale of production, and usually distribute less dividends; Growth stocks are suitable for long-term investors, who get huge investment income from long-term stock price rise.
So we know that there are still differences between cyclical stocks and growth stocks. Growth stocks are suitable for long-term investors and can bring sustained and rich returns to investors. Cyclic stocks are suitable for new investors to buy, underestimate buying and hold for a long time.