While the markets continue to do quite well, many investors have seen
some sector rotation starting to take place. The move as of late has
been out of lower risk, high dividend, sectors like utilities and real
estate investment trusts, and into higher risk, growth sectors like
financials, consumer discretionary firms, and health care.
This rotation is pretty evident when investors consider a six month
chart of some of the major sector ETFs, and the dislocation between the
higher risk and lower risk ones.
Pretty much starting in early May, sectors like financials (XLF) and health care (XLV - ETF report) took a leadership role, and left ones like utilities (XLU) and consumer staples (XLP) in the dust.
Looking Ahead
Given this reversal, it may be worthwhile for investors to go with the
hot hand and stay in growth sectors. While a broad play could be an
interesting way to go, investors may want to delve a bit deeper, and go
with a surging segment of the health care world instead; biotechnology.(more)
Please share this article
No comments:
Post a Comment