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What is a Consumer Cyclical?

Consumer cyclical refers to a stock or group of stocks that are affected by changes in the economic cycle. Consumer cyclicals perform well when the economy grows and suffer when the economy stagnates or shrinks. When jobs are scarce and disposable income is lower, people tend to hold off on purchasing cars, traveling or buying new homes.

What is a Consumer Cyclical stock?

Consumer cyclical is a category of stocks whose performance is sensitive to the economic cycle, increasing when it boosts and decreasing during a downturn. It usually represents stocks of companies selling non-essential products or services like entertainment, high-end gadgets, sports cars, and expensive clothing.

What is the difference between Consumer Cyclical and noncyclical?

Some key differences between consumer cyclicals and noncyclicals include: Sensitivity to economic cycles: Consumer cyclicals are highly sensitive to economic fluctuations, experiencing significant ups and downs based on the state of the economy.

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