As the economy cycles from growth to recession, different market sectors have historically outperformed. If investors understand when a sector might be strengthening, it may help them search for potential investment candidates.
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Sector rotation is an investment strategy where investors move their money from one sector to another in order to take advantage of changing market conditions. During a recession, investors may rotate their money away from cyclical industries such as retail, hospitality, and travel and towards defensive sectors such as utilities, healthcare, and consumer staples. During a recovery, investors may rotate their money away from defensive sectors and towards cyclical industries.
When it comes to sector rotation, one of the most important things to consider is the current state of the economy. During a recession, investors should focus on defensive sectors that are typically less affected by economic downturns. These sectors include utilities, healthcare, and consumer staples. Utilities provide essential services such as electricity and water, and are often seen as a safe haven during a recession. Healthcare companies provide essential medical services and products, and are also seen as a safe haven during a recession. Consumer staples are items that people need regardless of the economic climate, such as food, household items, and personal care products.
During a recovery, investors should focus on cyclical industries that are expected to benefit from the economic upturn. These sectors include retail, hospitality, and travel. Retail companies provide goods and services that people may have delayed purchasing during the recession, and are likely to benefit from increased consumer spending. Hospitality companies provide services such as hotels, restaurants, and entertainment, and are likely to benefit from increased travel and leisure activities. Travel companies provide transportation services, and are likely to benefit from increased business and leisure travel.
When it comes to stocks to watch during a recession or recovery, investors should focus on companies with strong fundamentals and a history of consistent growth. Companies with strong balance sheets and healthy cash flows are likely to be better positioned to weather economic downturns. Additionally, investors should look for companies with competitive advantages that will help them remain profitable during both good and bad economic times.
Finally, investors should pay close attention to sector rotation and stocks to watch during a recession or recovery. By carefully monitoring the market and adjusting their portfolios accordingly, investors can take advantage of changing economic conditions and maximize their returns.
We are already in a big crash Inflation is a catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated. If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.
Love this!
There is a slight mistake in the graphics, the initial cycle overview shows industries, then power lines then food, and then oil. But later explanations and revised overview shows industries, then basic materials, then food, then power lines, etc. which seems correct. Rest it's a Nice and crisp presentation overall.
I had seen FIDELITY'S SECTOR ROTATION ANALYSIS, where POST-RECESSION, FINANCIALS and TRANSPORTATIONS is the one to go unlike this VIDEO. Similarly, CONSUMER CYCLICALS to be invested during LATE BEAR STAGE. M so totally CONFUSED. Can anyone HELP PLZ???????????
So, before the recession is over buy a crap load of crypto.
whose here for the incoming 2022 recession
you lose like all the gain from moving in an out from bid and ask losses
in 2022 none of the norms are followed by stocks. the portfolio perfroance depends on stock picking ……………………………..
the Fed screwed up the normal cycle.
Great video. What do you think the sectors AD-TECH (e.g. Digital Turbine or The trade desk), consumer loans (e.g. Upstart or Lending Club), online fashion retail (e.g. LVMH) and EVs (Electrical Vehicals e.g. Tesla) will perform during a recession?
Is there a chart or website or channel, that breaks down WHAT time of year each sector is at its strongest?
As well as a chart that shows historical data Year by year for each sector performance?
where will you invest in mining stocks?
is rotation just selling and buying the next sector or is there another method to actually rotate such as trading or exchanging tech shares for consumer shares for example?
so now best sector to invest would be consumer staples and energy ?
Defense Industry (Weapon Manufacturer): Pathetic
The pandemic and the gradual recovery provided a real-world example of this. Accurate.
Thanks for the video! Helps a lot!
TD ameritrade the best channel. Simple concise straight to the point!
This was EXTREMELY HELPFUL! Thank you!
Respected Mam, Many thanks for your research. As a small Indian investor, I would like to know the best sectors to invest in India right now. Please make a video on it at your earliest convenience.
CYCL = Sector Cycle Dynamic Rotation ETF
Wow. That was really helpful.
Outstanding video! I’ll remember this forever
So why is the tech down?
What about tza
Thanks
Great Video!! Ver Informative.
Is Walmart and target etc consumer cyclical?
how does a balanced sector portfolio perform?
I wouldn’t try timing the market. I buy index funds, etfs, and good companies instead of trying to time the market.
Thanks!
I'm triggered that she referred to the hypothetical trader as "her" and "she". I feel marginalized and like my feelings aren't validated by this video.
This rotation cannot be used anymore since this is not industry evolution anymore. The tech goes up extremely high for every sector
Which sector are we in right now?
Ok that's was insightful as hell. Using more instruments beyond stop loss or portfolio diversity such as short sales, options, bonds, and high volume day trading could really maximize profitability throughout sector rotation by being contriarian, in a sense.
cool
Tech stocks only go up