How Business Cycles Affect Market Industry Sectors

Many investors are always looking for the next investment opportunity and trying to determine how trends can and do affect the market and industry performance. To truly be a successful investor, it is not about performing the same as the market but outperforming the market performance. To do this, our forecast needs to be different from that of the general market.

There are two forms of influential changes. 

1. Structural changes are major changes in the way an industry or market operates as a result of major economic developments, such as new technological developments, major changes in the political landscape such as war, and major changes in supply and demand. 

1. There is a business cycle that affects the performance of companies based on the current economic conditions. In cycles where the economy performs well, companies will perform well and just the same in poor economic conditions the companies’ performance is lower.

Business Cycle