Sector Rotation and the Stock Market Cycle

Here is another one of our favorite charts, courtesy of Jim Stack and Investech Research. It shows how leadership shifts over three stages of a Bull run:>

Stages of Sector Rotation

Stage I:   The transition from bear market to bull. Cyclical sectors — Financials, Technology and Consumer Discretionary — outperform.

Stage II:  Mid-to-late bull market.  Materials and Industrials outperform, as do  Energy and Telecom stocks;

Stage III:  Nondiscretionary sectors — Health Care, Consumer Staples and Utilities — Recession proof products and services — are the most resilient as the bull begins to die.


Three Stages of Sector Rotation

Chart courtesy of Investech Research

What's been said:

Discussions found on the web:

Posted Under