Why Smart Investors Should Be Watching This Shifting 2020 Market Trend
Investors are inundated with regular updates on major indexes by financial news headlines. But digging a layer deeper into relative sector performance reveals valuable information on market sentiment and evolving investor strategies. This has been especially true in the unique and volatile conditions during 2020.
Ignoring these signals can lead investors into a false interpretation of market dynamics, and those sorts of mistakes can wipe out gains or obscure opportunities. These hidden messages can illuminate our position within a market cycle, which is important for executing periodic reallocation that is designed to lock in gains, increase exposure to previously lagging sectors, and limit downside exposure, thereby maximizing long-term gains.
The market swoon in February and March was broad-based, with no sector completely spared. The energy sector pulled hardest on the S&P 500 due to tanking global oil prices. Economic concerns, especially regarding the stability of large energy and industrial companies, also drove negative performance in the financial sector.
Source Fool.com
