Are cyclical stocks the best to buy because they will follow the business cycle back up the fastest? Does that mean I should buy banks when I think the economy is starting to turn around? Autos?
Or is another sector best? What about blue chip stocks? I know they are good in a recession, but what about in the transition to a bull market?
Another sector that I haven’t mentioned?
Thank you!
A rebound may happen but it depends on the time frame on when it happens. My personal belief is that if the economy starts to rebound in the next couple of years then yes – financial stocks may be a good investment. However, they have to survive the next couple of years and that can be a big question if they have the ability to weather the storm.
Technology stocks usually do well when the economy recovers because in the past twenty years they are the companies that led the economy out of recessions. If you can figure out when the economy is going to stabilize then maybe buying an index of funds such as the QQQQ (Nasdaq 100) may be a good idea.