Business Cycle

Business cycle refers to the fluctuations in the level of economic activity which an economy experiences in the long run(usually measured in the term of years).   The business cycle has 4 phases: growth(expansion), peak, recession(contraction), trough(bottom) and with a recovery, the economy enters a whole new business cycle.The business cycle is not a cycle per se, as its duration and turning points are believed to be largely irregular.

Some economists and investors believed the business cycle has been largely tamed by central banks etc but the financial crisis of 2008 proved that we still have a long way to go and investors should keep in mind that there will always be a recession after an expansion (and that the next bull market will always be around the corner.)

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