Are you investing or speculating?
If you are investing for the long-term, it would be best to create a diversified portfolio, either through mutual funds, ETFs or individual stocks spread amongst many sectors. Specific sectors perform better than others for a particular period of time, but rotate as the economy changes. Having positions amongst different sectors decreases your risk of choosing the wrong sector at the wrong time.
If you are speculating, you are being “tactical” in the short-term. The objective is to purchase shares when they are cheap and unload them after they rise in value. There is much more risk in this strategy because you are putting all your eggs in one basket. Get it right and you can win big, but getting it wrong can cost you.
If you’re going to speculate, do it with money you can afford to lose. Look for sectors that have declined in value (buy low) and have an exit strategy to sell at a certain price (sell high). Or, look at a sector rotation mutual fund where a manager does the work for you.
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