Amid the rabble of traders fighting to chase stocks, people tend to miss the bigger picture. Everybody is in this game to outperform the market. Looking for individual leaders is important, but in order to do that efficiently one must be ahead of the sector rotation curve to spot where the cluster of leaders is being generated.
Just like overall business cycles, sectors also have their trends linked to economic rationale. For example, overall growth outlook of any economy first impacts the Banking and Finance sector, followed by Infrastructure. The Metals and Mining sectors follow the commodity cycle, while the FMCG sector picks up on consumer confidence. While there is almost always an economic rationale behind these trends, there is an objective and efficient way to spot sector rotations. Continue reading “Learning Article : How to Leverage Sector Rotation to Outperform the Market”