Tag Archives: sector rotation

E*TRADE's Monthly Sector Rotation report highlights investor movement across S&P 500 sectors. In August, Consumer Discretionary, Information Technology, and Consumer Staples saw positive inflows, while Communication Services, Health Care, and Financials faced outflows. Despite concerns about a tech sector rotation, IT continued its strength, driven by stocks like Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT). Meanwhile, Real Estate declined sharply amid rising interest rates and economic uncertainty. Historical trends suggest that top-performing sectors, like tech in 2023, often lose momentum the following year. This dynamic could impact sector performance in 2024.

Today's article looks at two poor (but popular) strategies that investors employ during a crisis and one winning strategy that you can execute. Keep in mind that we'll be discussing what investors could do during a sell-off, not what to do in anticipation of a sell-off during a bull market.

Knowing where we are within the business cycle can help investors better position themselves for superior returns [because, as we all know,] during economic expansions equities typically outperform fixed income investments while the converse is typically the case during economic downturns. Current analysis of the business cycle suggests a period of slower growth ahead, not just in the U.S., but also globally, [but no signs of an impending recession. Let me explain.] Words: 834