Home > Finance > Contrarian Capital: Business Cycle Indicators Help Forecast Investment Performance

Contrarian Capital: Business Cycle Indicators Help Forecast Investment Performance

A mid-sized, privately-owned, international financial firm focused on distressed securities, Contrarian Capital Management develops investment opportunities aimed at generating robust income potential. The team at Contrarian Capital possesses significant expertise in the identification of market indicators.

Defined as periodic fluctuations in economic activity driven by corporate revenues and other variables, business cycle indicators help predict economic upswings and downturns. The business cycle broadly encompasses such events as contractions, which represent a slowing of economic momentum, and expansions, during which economic activity escalates, and the economy reaches its highest levels of activity.

The causes of business cycles prove elusive to most analysts because so many factors contribute to fluctuations. Gross national product, gross domestic product, government policies, and credit markets all play an important role in business cycles. Consumer confidence, appetite for spending versus saving, availability of raw goods, and inflation also influence the duration and intensity of boom and bust periods. In many cases, drops in industrial production lead to increased unemployment, while inflation lags behind other indicators. By carefully monitoring the GDP, GNP, employment, and inflation, financial analysts hedge their investment options to facilitate the best possible outcome.

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