In this podcast, we take a look at how (and why) financial companies may be rising from the dead. The stocks in the financial sector have been comatose for several years!
This is important because the financial sector is one of the largest sectors in the S&P 500 Index of companies. The market is scaling new heights — and has been accomplishing this WITHOUT the participation of the financial companies (banks, brokerage firms and insurance companies). If the re-awakening of the financials is for real, the market may have further to run.
We won’t predict what will happen in the future (whether near-term or long-term). When the charts change, we will change as well. I would also add the following:
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment or investment strategy will be profitable or equal to past performance levels.
All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions, or withdrawals may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s portfolio.
If you are relying on a blog post for specific investment advice, you are making a huge mistake. Please speak with an investment adviser before making ANY investment decisions.
If you do not have an investment adviser, we encourage you to contact Mullooly Asset Management at 732-223-9000, or through our website. Under no circumstances should the content discussed here to be considered specific investment advice.
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Is Biotech The Next Sector To Make A Move?
by Thomas Mullooly on March 30, 2012
With the stock market at overbought levels, finding the right sector to put money to work becomes more important than ever. With this in mind, we look at what happened with homebuilders, and how that sector moved from an average market performer, to an over achieving sector.
We noticed that the bullish percent index for the homebuilder sector turned positive, in late November/early December 2011. We also observed that the percent of homebuilder companies in a positive trend also turned positive at the same time. Additionally, we noticed the percentage of companies with improving relative strength turned to X’s shortly thereafter.
While the experts were still telling investors to avoid the home building sector, in the past three months this sector rose 22%. Now these same experts are calling the bottom of the housing market and recommending investments.
This is why it can be very damaging to your portfolio (and damaging to your investment returns), if you pay too much attention to what the media is reporting.
The media — even the financial media — can often be way behind the curve. Most of Main Street investing, however follows the financial media. This is one reason why I continue to employ the use of point figure charts to manage your money. It’s important to see which sectors and which specific names are starting to see increased demand (and which other names are starting to see an increase in supply), and then move accordingly.
Using this same approach, we have begun to notice increased demand in the biotechnology sector.
We’ve noticed that the bullish percent index for the biotechnology sector has turned positive. We also observed the percent of biotechnology companies in a positive trend has also turned positive. Finally, we have noticed the percentage of companies in the biotech sector with improving relative strength continues to increase. This certainly helps put the biotechnology sector on our radar scope.
If you are relying on a blog post for specific investment advice, you are making a huge mistake. Please speak with an investment adviser before making ANY investment decisions.
If you do not have an investment adviser, we encourage you to contact Mullooly Asset Management at 732-223-9000, or through our website. Under no circumstances should the content discussed here to be considered specific investment advice.
Podcast: Play in new window | Download
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