The Fundamentals of Sector Rotation by Paul and Carole Huebott
Maintaining an optimized portfolio of strong blue-chip stocks is one way to invest. Here are the basics of how stock groups move through a typical business cycle.
Our new Dow strategy, described in the August 1996 STOCKS & COMMODITIES, is a formula system operating on the sector rotation principle. But sector rotation can also be practiced on fundamentals. Hereís how.
Each issue of Barronís provides market performance data on 96 industries in nine industrial groups. These groups are sometimes called sectors, and we use the two terms interchangeably.
One of Barronís nine groups contains only the
conglomerates ó companies involved in many industries and probably more than one industrial group. For our purposes, however, letís forget about the conglomerates. Some of them may be great investments from time to time, but they donít lend themselves to the sector rotation strategy of investment.