Investors Should Look to Sector Rotation for Returns

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During times of economic recovery, stock market investors can use the phenomena of "sector rotation" to enhance their returns. Sector rotation is a pattern where certain sectors lead the investment markets during different phases of the economic recovery and then rotate to another sector during the next phase of the economic recovery.

Wilkes-Barre, Pennsylvania (PRWEB) November 3, 2003 -- In times of economic recovery, investors can often take advantage of investment opportunities through "sector rotation" according to Robert H. Graham, President, Riggs Asset Management Company. That is to say, that historically, certain sectors of the equity markets get "boosts" during each phase of the economic recovery. During the early stages of an economic recovery the more cyclical and/or speculative sectors (such as technology) take the lead in the equity markets as investors anticipate better times ahead. The steadier and less economically sensitive sectors (such as health care and consumer staples) will tend to lag during the early stages of economic recovery but as the recovery matures the leadership roles will reverse or "rotate" and the steadier sectors will pick up steam.

The savvy investor can anticipate this rotation and take advantage of investment opportunities. The below chart illustrates the boosts in the Information Technology, Financials, and Consumer Discretionary sectors over the last 10 months.


Sector*                         S&P 500 Large Cap S&P 400 Mid Cap S&P 600Small Cap

Information Technology    30%                     24%                    26%

Financials                    24%                     17%                    13%

Consumer Discretionary    21%                     20%                    31%

Industrials                    11%                     13%                    12%

Health Care                     4%                     17%                    10%

Consumer Staples                     3%                     4%                     1%

Energy                                     3%                     0%                     2%

Materials                                     3%                     0%                     3%

Utilities                                     2%                     4%                     2%

Telecomm. Services    -1%                     0%                     0%

Total                                 100%                    100%                     100%

Riggs Asset Management Co., Inc.

This sector rotation may especially be true in the Large Cap area where money will tend to flow to perceived "safer havens" as the bull market matures. As a result, investors may want to anticipate the sector rotation and identify those sectors likely to lead the pack during the next phase of economic recovery.

For additional information on sector rotation, please contact Robert Graham, President, Riggs Asset Management at 570-823-3383. Riggs Asset Management Co., Inc. is an independently owned investment advisory firm with more than $125 Million under management. Family groups, trusts, and institutions retain Riggs to provide investment management and guidance.


Elizabeth Graham

Riggs Asset Management Co., Inc.

570-823-3383 Phone

570-823-3416 Fax

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