Are cyclical stocks more volatile?

Are cyclical stocks more volatile

Yes, cyclical stocks are indeed more volatile, as demonstrated by General Motors, which saw a decline of over 96% during the 2008-2009 financial crisis.

General Motors (GM)

During the 2008 financial crisis, General Motors’ stock price dropped from around $30 in mid-2007 to less than $1 in mid-2009, a decline of over 96%. In 2008, global car sales fell sharply, especially in the United States, where sales decreased by 18%.

Boeing (BA)

During the 2020 COVID-19 pandemic, Boeing’s stock price fell from around $340 in early 2020 to about $95 in March, a drop of over 72%. Additionally, the company faced the grounding of the 737 MAX aircraft.

Occidental Petroleum (OXY)

In the 2020 oil price crash, Occidental Petroleum’s stock price fell from about $47 at the beginning of the year to around $9 in April, a decline of over 80%. Oil prices dropped from around $60 per barrel in January 2020 to less than $20 in April.

Global Economic Indicators

According to the International Monetary Fund (IMF), global GDP growth decreased by 0.1% in 2009. In 2020, the global economy contracted by 3.5% due to the COVID-19 pandemic.

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