Sector overview

It’s best to diversify across the five main sectors of the economy: finance, utilities, consumer products and services, manufacturing and resources. Each of these broad sectors is made up of sub-sectors that often have different outlooks. Below we show our outlook for each sub-sector over the next six to 12 months.

Remember, though, there’s danger in loading up on stocks in sectors that we expect to beat the market.  For instance, Oil and Gas stocks are looking pretty good, as are insurance,Investment Co’s. & funds, tech and trasportation. Just tread carefully with these because investors often bid up the prices of such stocks, making them vulnerable in market setbacks. Stocks in sectors that we expect to underperform, by contrast, often trade at bargain levels. Besides, predictions—including ours—are susceptible to errors. So make sure you own some stocks even in sectors that we expect to lag the market.

Sector
Sub-Sector
Outlook
Financial
Banks & trusts
Investment Co’s. & funds
Insurance
Match
Outperform
Outperform
Utilities
Gas/Electrical
Pipelines
Telephone
Underperform
Underperform
Underperform
Manufacturing
Building materials
Chemicals
Fabricating
Engineering
Steel-related
Technology
Transportation
Match
Match
Match
Match
Match
Outperform
Outperform
Consumer
Communications
Food, beverage & tobacco
Health care
Merchandising
Underperform
Underperform
Underperform
Underperform
Resources
Gold & precious metals
Oil & gas
Metals & minerals
Paper & forest products
Match
Outperform
Match
Match