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Friday, July 28, 2006

Sector Rotation Update: The Picture is Clear!!!


Sorry for the late sector rotation update. Ever since our last update 2 weeks ago here's how the sectors fared:

Consumer Discretionary - Flat
Technology - Worse
Industrials - Worse
Materials - Worse
Energy - Worse
Consumer Staples - Flat
Healthcare - Better
Utilities - Better
Financials - Flat

Notice how the market's rallying but only 2 sectors are faring better? The strong performance in utilities and relatively stable positive performance of financials just confirms what we have always been saying... interest rates have peaked or are near the peak. The reason why financials are not performing better because they'll probably do bad when interest rates do come down (which is still a big "if"), and the pause in rate hikes will just be a temporary reprieve. Healthcare is the best performer in the past 2 weeks, showing the defensive nature of the market. But take note this is the laggard of all the defensive sectors due to concerns about competitoin and rising healthcare costs. Anyways, the COL fund is officially starting in August, and I'll be posting my focus list.

TERENCE

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