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