There’s a big sector rotation taking place, so today I thought I’d discuss stock market sector rotation strategies — and two hot stocks to watch…
And since moving your money into momentum plays can help you beat the stock market, I thought we’d break down how money rotates between sectors.
Financials and Industrials are leading the pack right now, while Technology, Consumer Staples and Utilities are lagging among the major sectors.
But here’s the interesting thing about this…
Consumer Discretionary and Technology tend to trade in step with each other, just like Utilities and Consumer Staples or Industrials and Materials. They’re like the opposite sides of the same coin!
But when Consumer Discretionary gets out of line with Technology, it means the stock market is fragmented.
That’s to say… something isn’t right — like right now the Nasdaq 100 is trading below its 50-day moving average, telling us things aren’t running as they should.
So what does it all mean? And more importantly, as investors and traders, what are some stock market rotation strategies you can follow?
You don’t want to be loaded in an entire index. You also don’t want to be loaded in the S&P 500. You might as well just get into index funds if you want to make average returns.
Instead, you want to pick which sectors where you can be long and short. So if you’re holding the S&P 500 and think you’ll have the best stocks in the best sectors just by holding the entire index that’s just not the case!
Over the past six months, for example, you would’ve only made 1.31% in Consumer Staples. But in Energy, you would’ve made 38%!
So imagine if over the past three months you only held Energy, Financials, Industrials and Materials. Your portfolio would be up about 28% to 30%. Whereas if you held the entire S&P 500, you would have some stocks that only gave you 6%, 7% or 10% returns.
This is why having stock market sector rotation strategies is so important if you want to maximize your returns.
By taking specific sectors that are moving higher and focusing on them while ignoring those that are lagging, you can put yourself in a winning position.
But I’ve got something even better for you…
What if you bought calls and went long on the bullish sectors, and then sold the weakest sectors short? You could make money from the market going both up and down at the same time. That’s what I call a double whammy!
The bottom line is that, right now, you don’t want to be in Health, Technology, Utilities and Consumer Staples… But rather Energy, Financials, Industrials and Materials.
And I want to show you two stocks that are a part of this stock market sector rotation strategy, and receiving a lot of attention from investment banks
So check out the video below to learn more about these stocks and the big sector rotation taking place right now, and feel free to leave your thoughts in the comments section.
And as always, don’t forget to subscribe to my YouTube channel if you haven’t already so you can be notified as soon as I post my next video!
P.S. We’ve all heard that buy-and-hold strategies are the surest way to make money in the stock market…
But I’m here to tell you that’s simply not true.
In fact, one Wall Street insider just revealed the secret to making triple-digit gains on stocks like Facebook and Apple… in as little as 24 hours.
Stop waiting years for your investments to pay off when you can start enjoying returns today!