Re-affirming our Sector Conviction List

by Wayne Ferbert on May 24th, 2012

We haven’t talked about which sector ETFs we like in a while. At Buy & Hedge, we often perform a little bit of sector rotation in our portfolios. It is how we fill out the ‘inner guru’ portion of our portfolio.

We haven’t talked about the sectors we like lately because the list really hasn’t changed. We still like Technology – as a long-term trend. We still like Energy – also as a long-term trend. We like Financials on a valuation basis.

We still have conviction on these three sectors. Energy has really struggled in 2012 and we think the pullback represents a buying opportunity. If you are in a position to re-balance your portfolio or putting new money to work, consider Energy.

We had liked Technology almost 2 to 1 over Energy and Financials. But with the pull back in Energy and Financials, we think a ratio of 3:2:2 for Technology : Energy : Financials makes more sense.

The ETFs we still like that cover these three sectors are all SPDR sector ETFs: XLK for Technology, XLE for Energy, and XLF for Financials.

For a specific way to play the XLF, check out our re-vamped/re-launched newsletter at Minyanville.com. Here is a link to the newsletter and to the article.


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