How You Could Make Money in Both Cyclical and Structural Stocks

Chris Versace

Chris Versace is a financial columnist and equity analyst with more than 20 years of experience in the investment industry.
[happy investor up arrows]

We are two-thirds through the current quarter, and while there are signs it is far stronger than the March quarter, we’re still looking in the rear-view mirror this week. By that, I mean we’ve gotten our second snapshot of how dismal the level of growth was in the first quarter of the year. Remember, economists originally forecasted it would come in near +1.3%, and the initial reading at 0.1% was just above no growth. On May 29, we received our “second look,” which supposedly gives us a clearer picture of the quarter’s economic activity. It came as no surprise the revision painted an ever-darker picture of the economy during the March quarter with its -1% reading.


Now we can get all down and dour looking at that figure, but as I just mentioned, it’s now behind us.

Stock prices have moved up, down or not at all in the first quarter. Companies have reported their revenue and earnings per share (EPS) results for that time period and the stock market has moved on. In other words, the stock market is a forward-looking animal with a view of three to nine months ahead. Sometimes that lens gets a little foggy and sometimes a little jaded, but it usually comes back into focus over a period of time. That’s what’s happening now, as the economic data around the globe paints the picture of a better and improving economy for the current quarter.

Anytime we see a shift from contraction to expansion when it comes to the economy, it means looking at companies whose business models are tied to a pickup in economic activity. One simple example is trucking — as the economy heats up, more goods need to get to more places, plain and simple. While rail is part of the solution, goods need to get to and from rail to or from distribution points, companies and individual homes. I’ve positioned subscribers of my investment newsletter PowerTrend Profits accordingly. There are other examples, from industrial conglomerates like General Electric (GE) to even sensor companies that are seeing their product embedded in more and more industrial and consumer applications.


We’re profiting from those investments at PowerTrend Profits… can you say the same?

Aside from cyclical stocks — those tied to the swings of the economy — another investment strategy is to look for those structural shifts, be it in technology, manufacturing process, materials or some other facet that disrupts the way a business operates and competes. Some great examples have been mobile, the Internet and social media, which have made for great investments for PowerTrend Profits subscribers in 2013 and 2014.

Rather than have cyclical or structural investments, the prudent strategy is to have a combination of both in your portfolio, and that’s exactly how PowerTrend Profits subscribers are positioned. We’ve even got several defensive plays, as well as a few of what I call dividend dynamos — companies that increase their dividends year in, year out, no matter what is going on in the economy. Buying one or two stocks is easy, but when building a full portfolio, you need to have complimentary and opposing strategies at play to minimize risk and maximize your profit potential.

share on:

Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle


DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops