| In a never-ending attempt to help you reach your | | | | sector funds, or choosing a specific sector fund. |
| financial goals, there are more investment | | | | They can be a difficult investment to time |
| opportunities available today than ever before. | | | | correctly and they aren't generally recommended |
| Now, sector funds offer you one more tool in an | | | | as a short term tool without some sort of |
| ever-growing list of financial instruments. | | | | professional assistance. |
| But are sector funds right for your portfolio? | | | | But which sectors have been doing the best? And |
| Sector funds are a fairly simple concept. They're | | | | which are doing the worst? Well, the answers are |
| a collection of stocks in a specific industry or | | | | fairly obvious. According to Morningstar, the best |
| sector. Whether they are exchange-traded | | | | sector in the last five years is, of course, energy. |
| sector-funds or mutual funds, sector funds come | | | | And what about the worst performing sector in |
| in a variety of choices. Standard and Poor's splits | | | | the last five years? You guessed it, technology. |
| up the U.S. stock market into 10 separate areas. | | | | Of course, past performance does not guarantee |
| They are: consumer discretionary, staples, health | | | | future returns. |
| care, utilities, industrials, energy, materials, | | | | One important question to ask is: What sectors |
| telecommunications, information technology, and | | | | will do well in the coming months and years? And |
| financials. | | | | that is where opinions may differ. Some experts |
| Each sector has its advantages and | | | | believe energy will continue to do well, while |
| disadvantages, the impact of which will vary | | | | others point towards emerging markets as a sign |
| depending on your personal situation. | | | | of future growth. Countries like China, Brazil, India |
| Because sector funds are able to focus on | | | | and Russia, are all starting to benefit from a |
| specific investment opportunities, accentuated | | | | developing middle-class. |
| returns both on the upside and downside are | | | | Others still, believe that the financial services |
| possible. This provides yet another example of | | | | sector will do well in the near-future. No matter |
| why diversification across different asset classes | | | | what sector the experts believe will do well, |
| in an attempt to reduce overall volatility and risk is | | | | sector funds may offer an added tool to help you |
| so important. Unfortunately, diversification does | | | | achieve your financial goals. |
| not protect against or prevent losses from | | | | Sector funds speak to the investment needs of a |
| occurring in down market cycle. | | | | very select group of investors and are a unique |
| Choosing when to invest is also just as important | | | | tool. But different needs and objectives mean a |
| in sector funds as it is with other investments. | | | | different style and it's best to consult a financial |
| When you choose to enter into a particular sector | | | | professional along the way. With the unique ability |
| can make a huge difference on how much you | | | | of sector funds to focus on a specific industry or |
| gain or lose. Making sure you utilize the advice of | | | | group, they may be an added investment tool at |
| a financial professional is an important step to | | | | your disposal. And in the end, you may just find |
| take when deciding whether or not to invest in | | | | yourself in the zone. |