Skip to content

Thinking about your family's future? Attend one of our upcoming Trust Seminars and learn how thoughtful planning can make a lasting difference. Register here.
Investments are not FDIC insured, not deposits, and may lose value.

Due to scheduled maintenance, online account opening will be unavailable during afternoon and evening hours on Saturday, Nov. 14. We apologize for any inconvenience. 

Get Started 863-222-7005

Best vs. Worst

Crews Bank & Trust Wealth Management Services Apr 25, 2022
chart shows the spread between best and worst performing sectors

Contents

Some investment managers promote a strategy called “Sector Rotation” where they try to time the market by trading between the 11 major sectors of the economy. The gains can be tempting, but the risk is high. For instance, if you owned all energy stocks, you would be up +40% year to date, but if you thought communications was the place to be, you would be down -20%. This is a possible difference of 60% in your returns. According to the chart, which includes more sub sectors, the difference is the highest since 2000.

Numerous studies show that you would have the same chances of success as these investment managers by simply flipping coins. In the long run, the risk adjusted returns from a well balanced portfolio is a safer way to invest in the market.

And oddly enough, in 2000, energy was down -30% and communications were up +30% -- the same difference as today of 60%.
Estate Planning

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

Previous
Sale and Dividends
Next
Real Estate vs. Stock Market

Subscribe to Our Blog

Sign up to receive email notifications of our blogs.