(Direct translate from chinese article) Peter lynch once said: "If you are in the right, investment in the field, you can make a lot of money, and it is fast, but for most investors, the challenge is in every economic cycle, Can be investing in the field of choice. "
An economic cycle is a period in which the national economy turns from the peak to the bottom, and then returns to the peak period, it usually interprets 4 stages: economic and indigenous, expansion / recovery and peak period, for economic reactions, such as stock Performance, usually in the initial stage of the economic cycle, the performance tendency, is the growth of growth, and then slowing in other phases, usually in the economic loss of the economy. Conversely, some of the more fell assets such as Treasury bonds, usually reversed trend, with higher elevation, with higher elements, different stocks, in the economic cycle, and their performance is the worst. The stock market is the leading index of the economic cycle has been proven that it usually takes 6 to 9 months before the cycle, several economic indicators, gross domestic product, industrial production, interest rates and recovery curves, and give us an important guidance, which is economical. Trend, as well as the performance of the stock market. Some investors seek investment strategies in the field, seeking to earn profits from economic cycle changes, and the field turns to invest in different economic cycles, and enter and enter the "turntable" investment in different fields. Its strategy is usually: allocation of more assets to economic cycles performance, reducing investment proportionality is not as expected, this strategy is to establish a combination of investment reward than the big market. The premise of the field turning investment strategy is: the investment of stocks of the same industry company is inclined to the same model, the conditions are the same industry stock price, affected by the same fundamental and economic factors, generally the field classification architecture itself product. Simply put, according to business models and operations, the company is in the same group, ensuring that the company is facing the same economic factor and sensitivity factors in a field. Currently, the Global Industry Category (GICS) architecture includes 11 areas, consumers with usage products, consumer main products, energy, finance, medical care, industrial, information technology, raw materials, industrial, information services and utilities. In order to implement the field turnover strategy, many investors deploy "from the top" strategy, which involves analyzing the entire market, including monetary policy, interest rate, goods and investment production costs, as well as other economic factors, which can help assess the current economy. The environment determines the current stage of the business cycle. To understand the economic factors of individual areas or industries, investors can help investors to estimate future performances, identification areas or industries to facilitate the current and commercial cycles, depending on the business cycle, such as the initial, medium, and later Or the stage of economic downturn, some field performance is expected to surpass other areas.
Although individual business cycles are unique, based on traditional data, some field performance tend to perform well in different stages of the business cycle, the field turns investment strategy, may help investors, according to market prospects, different economic cycles Stage, adjust their combination investment.
For example, the recent price is high, we are in the high-pass gentle, the consumer field will benefit from higher inflation, the company will pass the cost to consumers, the bank sector will increase the interest rate And benefit, based on the price of primary brown oil and crude oil, planting, petroleum and natural gas field performance will be optimistic. In addition, based on the overall economic growth, trade and service areas will also be optimistic.
Through the adoption of the field investment strategy, investors face the portfolio performance fluctuations, often re-adjust the risk of combined investment, transaction fee, may result in poor performance of the big city index; in addition, the industry has different fundamental performance The machine may be masked by the level of performance, resulting in different fields in different fields, and different situations.
Like all investment strategies, the field turns through investment, has advantages and disadvantages. If you cautiously implement the turning investment, you can take the opportunity for investors to take a certain field. In this strategy, the timing of entering the field is critical. If you often adjust the combination investment, investors may lead to higher transaction costs.
When investors know that certain areas have respond to business cycles, perhaps to master their combination investment, in all, the field turning investment strategy may help maximize investment reward, but the conditions are: investors must in depth understanding of the economy Factors, the business mind is good.