Understanding the Business Cycle and Portfolio Strategy

During the course of economic cycles, businesses encounter various phases that can significantly impact their operations and profitability. These phases generally include expansion, peak, contraction, and trough. Understanding the business cycle is crucial for investors and portfolio managers as it can influence investment strategies and decisions.

Your task is to define the four phases of the business cycle. Additionally, explain how portfolio managers can adjust their investment strategies based on the current phase of the business cycle.