2 Answers: Seculars and Cyclicals. How are Stocks divided?

Question

Any information on Seculars and Cyclicals and how this is useful to investing in the stock market today.

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Brian Chapman 5 months 2 Answers 68 views 0

Answers ( 2 )

  1. Stocks are also divided into two very important categories: the Seculars and the Cyclicals. The big difference is in the way that they make their profits. They are for responding to the relative strength and weakness to the economy. Secular stocks make up stocks that people need regardless of the state of the economy. For example, consumer staples, which are basically supermarkets, etcetera, or healthcare, basically, services that people will always use even during a weak economy.

    Opposite to these are Cyclicals. Sectors and companies that require a strong economy to thrive. Industries such as travel or luxury goods are some of them. During times of economic hardship, they tend to have decreased profits as people try to cut down all their unnecessary expenses.

  2. This is really talking about things that can be called “futures”. A future stock is any type of stock which needs to be purchased regardless of economic conditions. For example if you are investing in stock for TESCO or COLES or another supermarket, food needs to be bought regardless of whether the economy is bad on not. So that is Seculars, or Futures.

    The other then, Cyclicals in this case, are luxury items that may not be purchased in an economic downturn.

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