Definition of Cyclical Stocks

Cyclical stocks are stocks that follow the general economic environment.  The automotive industry is a prime example of a cyclical sector.  Cyclical stocks do well in times of economic prosperity and suffer greater during times of economic recession or hardship.  Conversely, health care stocks are a great example of non-cyclical stocks as there will always be a need for health care, regardless of the economic situation.  These stocks typically have consistent profits, rather than spikes.