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BEST Sectors for Investment during Economic Slowdown is one of the most frequently asked queries in recent times. As an investor, It is important to understand that there are a correlation between the economic cycle, stock market cycle and the performance of various sectors of the economy. In this video, we will discuss the BEST Sectors for Investment during Economic Slowdown.
The reason for the correlation between the economy, stock market and sectors is the cyclical factors like interest rate, inflation, corporate earnings, and other macro-economic factors.
During the early cycle, it is better to invest in interest-rate sensitive stocks like consumer discretionary, financials, real estate, industrial and transportation. You should avoid, communications, utilities, and energy sector stocks.
During the middle of the cycle, you can invest in IT and capital goods stocks. Whereas you should avoid, metals and utilities during this phase.
During the late cycle, you can invest in energy, metals, health care and the utilities and you can skip the IT and consumer discretionary stocks.
Now coming to the key question i.e. BEST Sectors for Investment during Economic Slowdown, you should focus on FMCG, utilities and health care. Investment in Industrials, IT and Real Estate should be avoided during this time.
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