It would probably take a major downturn in economic data or a very severe US stock market correction to divert the Fed from that rate hike path at this juncture. BlackRock, in its outlook for emerging-markets equities, makes a somewhat hesitant bull case for the year ahead:. Country-specific risks — such as a series of EM elections and currency crises in Turkey and Argentina — look to be mostly behind us. We see the credit impulse turning positive in and fiscal policy becoming supportive. And economies are adjusting: Currency depreciations have led to improved current account balances in many EM economies.
We are cautiously positive on EM assets for Other catalysts are abating trade tensions and a weaker U. The biggest question investors face in about dipping a toe into China may not be whether to do so … but how to do so. Jay Jacobs, head of research and strategy at fund provider Global X, says:.
CFRA provides a general breakdown of how investors should allocate their portfolios in the year ahead, as well as a few more specific recommendations:. We suggest reducing the exposure to U. One reason for the reduction in U. Though not a signal of an impending top, this rolling year CAGR implies that the bull may be running out of steam. Income investors should also remain attracted to overseas markets since they yield more than their domestic counterparts.
Also, a few notes on sector recommendations. Needless to say, in that reality, investors will have to be pickier about where they take their shots. In addition, a rising interest rate environment, potentially with tightening financial conditions, may create a challenge for small cap companies that have higher costs of capital and a greater reliance on debt.
Accordingly, over the next several months, we suggest suitable investors shift toward target allocations across market capitalization with benchmark-like exposures to small, mid, and large cap stocks. VALUE: We maintain our slight preference for value despite its underperformance relative to growth in We expect value in to benefit from the pickup in economic growth that began in mid, relatively attractive valuations after a sustained period of growth outperformance, and our positive view of financials.
The cautious tone JPMorgan set in its outlook for the U. While history suggests that there are still attractive returns to be had in the late stages of a bull market, the transition away from quantitative easing and toward quantitative tightening has contributed to broader investor concerns. Many equate this new environment to walking on an investment tightrope without the liquidity safety net that has been present for over a decade.
The best answer is probably a little bit of each. As such, higher-income sectors like financials and energy look more attractive than technology and consumer discretionary, and we would lump the new communication services sector in with the latter names, rather than the former. However, given our expectation of still some further interest rate increases, it does not yet seem appropriate to fully rotate into defensive sectors like utilities and consumer staples.
Sheldon sees a shift away from the dynamic seen in the final quarter of , during which technology was battered, and investors huddled into defensive plays such as consumer staples and utility companies. Companies that operate in this area of the market are likely to be more volatile than the average company.
However, over the next several years, we believe that companies that operate in areas like cloud computing, web services, artificial intelligence, autonomous cars and robotics are likely to generate positive growth and attractive returns. The medical field is seeing the light when it comes to the very real benefits of AI in all things healthcare. Machine learning is already helping physicians make smarter decisions by making it easier to view and analyze patient scans. Genomic sequencing makes it possible to diagnose and treat diseases earlier than ever, and robot-assisted surgeries are improving surgical outcomes.
After more than two years of steadily rising bond yields and falling bond prices, which move inversely to yields , our research suggests that year Treasury bond yields may have peaked for this tightening cycle at the 3. Tighter global monetary policy, a strong U. As markets adjust to tightening financial conditions, volatility is likely to increase. Because short- and long-term interest rates tend to converge at cycle peaks, the yield curve likely will flatten toward zero.
We suggest investors gradually add to average portfolio duration when yields rise. Municipal bonds may post solid performance in , as demand appears strong for tax-exempt income. On the other hand, solid US economic growth combined with improved wage growth and low unemployment in the US support the expectation that the Federal Reserve will maintain the gradual pace of short-term interest rate increases through A bond ladder is a portfolio of bonds that mature at staggered intervals across a range of maturities.
If rates continue to rise, proceeds from each maturing rung of bonds can be reinvested in longer-dated bonds at higher rates. Defined maturity ETFs can help investors build bond ladders quickly and easily, with a range of bonds that can help provide diversification to a portfolio. Although the conventional wisdom would see those investors moving their attention to the fixed income market, we believe that the steady course of rising rates makes traditional fixed income assets unattractive, necessitating alternative methods to generate income.
Oil prices made the most noise with their precipitous drop, but gold — despite a year-end revival — finished the year lower, too. However, BofA sees rosier times ahead for several commodities in While stock prices tanked in the final quarter of , gold prices — and the gold investments tethered to them — enjoyed a renaissance. In , gold was impacted by the strength of the U.
To the extent higher interest rates slow U. Free Newsletters. TheStreet Smarts. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. I agree to TheMaven's Terms and Policy. Treasury yields were higher following a couple of strong economic reports. And ImageX. Randall Roth, an analyst with Renaissance Capital , said investors are more likely to invest in stocks at lower prices for the chance at a higher return later, should the Net sector become hot again.
Scroll to Continue. TheStreet Recommends. Sponsored Story. Financial Advisor Center. Exclusive Investor Content. Kass: What's Going On?
Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies. As with any search engine, we ask that you not input personal or account information.
Information that you input is not stored or reviewed for any purpose other than to provide search results. Responses provided by the virtual assistant are to help you navigate Fidelity. Fidelity does not guarantee accuracy of results or suitability of information provided. Keep in mind that investing involves risk.
The value of your investment will fluctuate over time, and you may gain or lose money. Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.
Skip to Main Content. Search fidelity. Investment Products. Why Fidelity. Home » Investment Products ». Print Email Email. Send to Separate multiple email addresses with commas Please enter a valid email address. Your email address Please enter a valid email address. Message Optional. Sector Investing Sector investing offers targeted exposure to the stocks of companies in specific segments of the economy and can help you pursue growth, diversify your portfolio, and manage risks.
Communication Services. Consumer Discretionary. Consumer Staples. Health Care. Information Technology. Real Estate. How does thematic investing compare to sector investing? Learn more about thematic investing at Fidelity. Sector investing tools and insights. Why Invest in Sectors See how we can help you achieve your goals with sector investing.
Tax-Deferred Investing Learn more about investing in sectors in a tax-deferred annuity. To access the tool, log in to your account at tdameritrade. Image source: tdameritrade. For illustrative purposes only. Past performance does not guarantee future results. In sector investing, the idea is that those with time on their side can ride out the storm.
But being too conservative also has risks, and sometimes a little risk taking, including sector-based investing, can help accelerate growth if properly executed. Of course, as investors approach and reach retirement, the risks looks less theoretical, and become starkly real.
Use Stock Screener to narrow selections based on sectors like technology. Log in to your account at tdameritrade. Not investment advice, or a recommendation of any security, strategy, or account type. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
Market volatility, volume, and system availability may delay account access and trade executions. Past performance of a security or strategy does not guarantee future results or success. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc. All rights reserved. Strategies and Seasonality in Sector Investing Sector investing can help align investments to specific objectives. By Dan Rosenberg April 12, 8 min read. Sift through Sector Candidates Use Stock Screener to narrow selections based on sectors like technology. Learn more about Stock Screener ».
Start your email subscription. Recommended for you. Related Videos. Consider Fully Paid Lending 4 min read. Call Us Site Map. Diversification does not eliminate the risk of experiencing investment losses. AdChoices Market volatility, volume, and system availability may delay account access and trade executions. This link takes you outside the TD Ameritrade Web site.
Clicking this link takes you outside the TD Ameritrade website to a web site controlled by third-party, a separate but affiliated company. TD Ameritrade is not responsible for the content or services this website.