Revealed: The best time in the economy’s business cycle for you to invest…

Fsp Invest, 09 Jan. 2014

Tags: business cycle, expansion phase of the business cycle, when in the business cycle to invest, how the expansion phase of the business cycle works, economic expansion, economic development, aggregate demand, investments



Economies don’t grow smoothly year after year. They experience cycles in economic activity. There are periods of economic expansion followed by periods of recession. We call these cycles ‘business cycles’. And the business cycle has implications for your investments… Let’s look closer…



In the expansion phase, aggregate demand increases. Firms have run down their inventories. And production increases at a faster rate than aggregate demand. 
 
It’s at this phase of the business cycle that businesses usually employ unemployed workers, who then consume goods and services. This generates more and more demand and allows businesses to employ more workers. 
 
This continues  until businesses encounter capacity constraints. If businesses expect demand to continue growing, they’ll invest in capital goods like plants, factories, machinery and equipment. 
 
And consumer demand will also increase, as firms producing capital goods employ more workers. 
 
So what all this means, is demand for investment funds will grow too, as businesses need your money to grow their businesses and keep up with demand in the economy! 
 
And that means the expansion phase of the business cycle is the best time for you to invest.
 
Because, as demand in the economy grows, the businesses you invest in will grow too! And that means your investment portfolio will also grow in value. 
 

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