Chart of the Day – Market, Economic Cycle
That’s the image you see below. A couple of thoughts…
First, yes, I know the market’s cycle isn’t synchronized with te economy’s cycle. Connect on Facebook | Follow on Twitter That’s why I have no intention of abandoning my current sector rotation methodologies, since they’re based on reality (emerging momentum) rather than history (which is assumption); I think the right answer is probably somewhere in between the two. In short, I’ve laid out the ‘average’ sector leaders during various stages of the market and economic cycle. They don’t.)
Second, while I love models and tendencies since they give me an edge, I hate exceptions, and I suspect there are plenty of them to this model. Market, Economic Cycles
FreeTradePicks.com | Login | Get all our email updates here! Anyway, the table should be of some value to you, but I would caution against making it something of tremendous value. I’ll certainly incorporate its themes, but I get married to nothing. To that end, I’ve decided to do some aggregating work to define something I know plays a role in sector rotation, but something I’d yet to actually put on paper. Though it’s easier said than done, it is possible, and the payoff is big. Regular readers will know by now that one of my core strategies for a strong alpha is using sector rotation…. That’s because the market trades about 6 to 9 months ahead of the economy. (That’s why I consistently ask the question “Do you think stocks actually trade at what they’re worth?”. the art of overweighting the leading industries, and underweighting the weaker ones.