Sector Rotation
Categories: Trading, Managed Funds, Mutual Funds, Index Funds
The S&P 500 comprises maybe a dozen different sectors. Energy, transportation, communication, consumer goods, real estate, banking, etc. At any one time, one sector can be hot, and then quarters pass, and it's... not. So where does the money go from the hot energy sector when it cools? Well, it rotates from that energy sector into the transportation sector for a while, and rotates into the banking sector after that. The endless wheel keeps turning.