Grading the major industry sectors
For much of this year, consumer discretionary stocks were the best performing group in the S&P 500 Index. With the economy reviving, consumers started spending, and investors figured the trend would roll on. It didn't. After rising 17 percent in the first four months of the year, consumer discretionary stocks dropped about 12 percent. These sorts of trends bear watching because getting the right industry mix is a key element in investing success. The truth is, choosing the right industries is often more important than identifying superior individual companies.
Which industry groups should investors emphasize now? Which sectors pass, which fail, which get an incomplete? Here's how the 10 major industry groups in the S&P 500 grade out.
[Story by John Dorfman, chairman of Thunderstorm Capital in Boston and a columnist for Bloomberg News. The opinions expressed are his own. His firm or clients may own or trade securities discussed in this column.]