What are counter-cyclical stocks? (October 18, 2001)
That is what we get for using a term and not defining it. Counter-cyclical could be any stock that rises (or falls) when the majority of the other stocks are falling (or rising). One of the best examples are 'defensive' stocks that some investors turn to in times of uncertainty. These would include oil companies (oil tends to rise in uncertainty, though it is defying that during this conflict), drug companies, health services, tobacco, and food to name a few. In times of uncertainty, growth stocks with their higher P/E's are sold for those things you can burn, eat, drink, smoke, etc., the theory being in tough times you still have to eat and stay warm, and a few vices may come to the surface as well.
|Previous Page||Next Page|