Stocks & Commodities V. 36:02 (22–25, 45): Capitalizing On Sector Rotation Strategies by Marisa Yang

Capitalizing On Sector Rotation Strategies by Marisa Yang

Traders can always learn something from investors and vice versa. Typically, investors put more weight into outperforming sectors. But is that the best way? Let’s find out.

Sometimes it’s oil, sometimes real estate, or sometimes just plain old large-cap stocks. If you follow sectors and reallocate your investments by more heavily weighting them into the outperforming sectors, consider yourself ahead of the game when it comes to momentum-based sector rotation strategy. What makes the strategy effective? It generates excess returns over related benchmarks. These benchmarks could be various asset classes such as commodities, equities, bonds, and currencies ...