Business cycle is the periodic but irregular up-and-down movement in production and jobs. A business cycle has 2 phases - recession and expansion - and 2 turning points - peak and trough. Calverley (2003, pp. 15-19) classifies business cycle stages and attractive investment opportunities as:
- recovery: country's cyclical stocks and commodities.
- early expansion: country's stocks and property.
- late expansion: country's bonds and interest rate sensitive stocks.
- early recession: country's bonds and interest rate sensitive stocks.
- recession: country's stocks and commodities.
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