Why some investors and analysts prefer to invest in next rotating sectors now?
Why some investors and analysts prefer to invest in next rotating sectors and countries now? I agree with them. Thanks in advance.
Best Answer
BryanPerry answered one year ago …
If we fail to rotate out of sectors where weakness in business conditions is apparent, then we are setting ourselves up for losses. But if we keep on top of the pockets of economic strength, we can then move our income assets to the right sectors accordingly.
We must always consider other strong sectors where potential upside exists because, often, once a sector is "hot," much of the opportunity has already been lost.
Exposure in senior housing, long-term health care facilities, biotech/labs, REITs, commodities (fertilizer, iron ore, copper, and lumber) and hybrid financing are just some of the sectors that are showing strong secular growth trends—and we use all of those tools in my 25% Cash Machine Service, in which we own and manage a basket of around 20 high-yield securities and rotate among the strongest sectors of the economy.
But, not only has the market for high-yield securities grown exponentially, the derivatives market has exploded in the past 15 years – especially in light of this financial downturn.
In my Tactical Trader service, we capitalize on these opportunities with a mix of long call options and short put options, to capture profits where and when we find, which has been key in the fast-paced market.
Answers
EthanR answered one year ago …
We can only look forward, not backward in the stock market. Why would I want to invest in a sector that has a month or to to go higher before it's finished (e.g. oil in the spring of 2008), when if I find a sector that is in the infancy of it's bull market, I can ride it for a couple of years.
The risk is that I may lose some money before the sector turns around and begins a bull market. I think we have seen that with financial stocks recently. But the potential rewards are worth the risk if you are investing for the long term.


