# 33 218-223 View full article

УДК 339.1

DOI: https://doi.org/10.36887/2415-8453-2024-4-33

Tryhubchenko Anton,
PhD candidate, Department of Entrepreneurship and Stock Exchange Activities,
National University of Life and Environmental Sciences of Ukraine,
https://orcid.org/0000-0001-7605-1603

JEL classification: O16

The article examines the impact of economic cycles on the effectiveness of investment decisions in business structures of different capitalizations, particularly large-cap and small-cap stocks. The four main phases of the economic cycle (expansion, peak, recession, and recovery) and their impact on changes in asset returns are analyzed. The author argues that during periods of economic growth, stocks of small-cap companies often show higher returns due to investors’ inclination towards risky assets, while stocks with large capitalization demonstrate more stable dynamics in the phases of slowdown and decline. The study highlights key macroeconomic factors that affect returns and risks in different cycle phases, such as changes in interest rates, inflation expectations, consumer demand, and employment levels. Particular attention is paid to asset rotation between stocks of different capitalizations, which occurs depending on changes in monetary policy and the investment environment. Using the recent crisis caused by the COVID-19 pandemic as an example, it is shown how non-standard economic conditions can affect investor behavior and sectoral market dynamics, particularly the faster recovery of sectors such as technology and telecommunications. The work results offer practical recommendations for investors on the optimal approach to rotation between large-cap and small-cap assets based on the analysis of macroeconomic indicators and the state of the economic cycle. The author emphasizes the importance of adapting the investment strategy to changing market conditions and global economic changes to achieve high portfolio efficiency in conditions of increasing volatility.

Keywords: inflation, enterprise, price risk, interest rate, trading strategy.

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The article was received 23.11.2024