FinancialEdge: The Best Business To Be In During A Recovery (And Why)

The idea that economies expand and contract over a period of years, through a process known as the business cycle, has been around for a long time. French economist Clement Juglar was arguably the first to discuss this in detail in 1860, and Joseph Schumpeter later assigned the labels that are most familiar to us - expansion, crisis, recession and recovery.


Whether the statistical data fully supports the idea or not, the reality is that politicians, business leaders and the media still speak in terms of a recession/recovery/peak/collapse cycle and many investors manage their money accordingly.

While any one company or stock can stand out and perform well in almost any stage of the business cycle, those are the exceptions and not the rule. The rule, by and large, is that stocks move roughly in tandem with their broader industry group. As a result, it makes sense that investors should want to know which groups tend to perform best during various stages of the cycle. So where do most investors want to be in recovery?

To read the full piece, please go to:
http://financialedge.investopedia.com/financial-edge/0810/The-Best-Business-To-Be-In-During-A-Recovery-And-Why.aspx