Saturday, June 13, 2009

Schwab Sector Views: Reflation Creates Opportunities

Have we finally broken through the economic gloom?

During the past couple of months, investors have been cheered by the more stable incoming economic and earnings reports data; in short, the relative stabilization of the financial sector.

The more confident investors are, the more they tend to increase their risk tolerance. Although we're not seeing signs of actual growth yet, we believe that investors are starting to take risks again so that they can benefit from the eventual recovery.

We believe that global reflationary policies, combined with the possibility of a continued weakening of the dollar will benefit the more cyclical technology, industrials and materialssectors.

In contrast, we believe the defensive-oriented consumer staples, telecommunication, andutilities sectors will underperform.

SectorsSchwab Sector ViewsS&P 500 bench-
mark weight
Dow Jones Wilshire 5000 bench-
mark weight
Date Sector View last changed
Year-to-date return as of06/11/2009
Consumer discretionaryMarketpeform9%10%05/28/200912.67
Consumer staplesUnderperform12%12%01/23/2009-1.31
Health careMarketperform14%14%04/17/2009-4.31
Information technologyOutperform18%18%12/19/200825.96
S&P 500® Index (Large Cap) 5.28


Anonymous said...

not pretty

Anonymous said...

nice post. thanks.