Beat the Market With Sector Rotation
Everyone wants to outpace the market, usually defined as theĂ‚Â Standard & Poor’s 500 index. While the stock market never guarantees you aĂ‚Â sure-fire win, there’s a clever approach that has triumphed in the last dozenĂ‚Â years. It involves rotating into the best-performing sectors annually. Last month, I wrote about this interesting investment strategy, which a pioneer of sector investing, Standard & Poor’s Sam Stovall, calls: “There’s Always a Bull …
Not Time to Panic
After a beautiful first quarter, which brought the S&P 500 a wonderful 12% return, things turned drastically downward. So far this month, the S&P 500 is down 2.82%. What is going on? Are we in for continued downward spiral or is this a correction? If you look at the first-quarter numbers, they all reflect rebound in economy and show growth. The top performing sectors showed continued stabilization of the financial …
There’s Always a Bull Market Somewhere
“Taking a buy-and-hold approach with sectors is like buying a Ferrari and then driving behind a school bus the rest of your life,” so begins Chapter 5 of Sam Stovall’s book, The Seven Rules of Wall Street. Without a doubt, if I had a Ferrari I would not want to drive behind a school bus ever. So, clearly I was intrigued by this. Here’s a bit of background about Sam …
A Case Study in Individual Stock Risk
As investors, we don’t like surprises. Even if there is a 50% chance of getting a good surprise from our investment, we don’t like the other 50%. We actually hate it, and there is more pain on the downside than happiness on the upside, and we remember pain longer. That’s just human nature. So imagine how Goldman Sachs (GS) investors felt last week, when on March 14 the company’s value …
Quell Your Worries With Liquidity
We’ve all heard the saying, “cash is king,” but in our investment world the word cash should be replaced with the word liquidity. Yes, for us, liquidity is king. Why am I even talking about cash and liquidity in this up market? After all, in this balmy and spring-like March, the market is doing very nicely indeed. Although the S&P 500 was down 1.6% in the first days of the …
Curb Your Worries
The market has dropped like a rock since Feb. 29, with the S&P 500 falling 1.42%, and it feels as though there is more room to go. Should we panic? Is this a beginning of the new “risk-off” period? The beginning of the year was stellar — the “January effect” rolled into some kind of February effect, and the S&P 500 gained an incredible 8.59% for both months. But it …