Picking the right sector

The vast majority of your returns are determined not by what stocks you choose to invest in, but what industries you choose to invest in.  With this in mind, one of the key things you should be doing when investing is deciding what sectors you think will do the best.  How do you do this?

Determining what sector should do well is actually a fairly simple task.  It’s all based on the observation that markets trend.  Day to day fluctuations may be fairly random and unpredictable, but the effect of those day to day fluctuations on the stock price over a period of months is generally consistent, weather it be up or down.

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ETF Basics

by: Jordan Weir

For many years, investors have attempted to diversify their overall portfolios by trying to pick stocks across a diverse set of asset classes. Which is all well and good, but the problem it generally runs into is you should also be diversified within any given asset class, lest something adverse happen to the company you happened to bet on. Yet as soon as your diversifying both within, and between asset classes, now your running a portfolio of potentially 40+ equities, and even the active investor rarely has time to do due diligence on the hundreds of companies required to find 40 excellent investments. Read the rest of this entry »