Industry Cycle

         1. Beginning Stage
2. Growth Stage
3. Maturity Stage
4. Decline Stage

** Investors should always remember these above stages while analyzing each industry. So, we can identify whether these industries are in the growth stage or any one of the above stages.

Beginning Stage :

 At this stage, the industry is new to establishing itself in the market. It will take time to settle in the market, this time is known as the " Beginning Stage". 
• Investors should be careful (aware of risk )while investing at the beginning stage of the industry.
• In these early days, it may make losses.
• It must be noted that the first 5 - 10 years are the most critical period. At this time companies as great chances of failing.
• It takes time to establish companies & new products.
• At this stage Risk will be high, so one should be careful while investing.

Growth Stage :

Once industries established themselves in the market, then they enter into the growth stage.
• As the industry grows, many new companies enter into this industry.
• At this stage, investors can get high rewards with low risk.
• In 2000, the best example was the software industry.
• At this stage, companies fight to improve their products which helps the company to grow well in the growth stage.
 
Maturity Stage :

After a golden/happy period of growth, an industry matures.
• At this stage, growth is moderate compared with the growth stage.
• Sales may increase at their products, which helps at this stage.
• At this stage,  margins will begin to decrease because of high competition.
• Investors can invest in these industries for comfort and average returns.

Decline Stage :

Finally, industries decline, this occurs because company products are no longer popular in the market. 
• People changed their tastes or lifestyle.
• The Risk at this stage is high compared with rewards or even negative.

**An investor should always try to invest/purchase shares at the end of the Beginning stage or starting of the growth stage of the industry & should begin to sell shares at the mature stage.