Values Added

The Financial Shuffle

Specific sectors of the stock market (Industrials, Technology, Healthcare, etc) vary a lot year to year. Some years tech is a big winner (2003!) relative to other sectors. Other years it’s a big loser (2001, 2002, and 2004) relatively. This is one reason why it is important to diversify. Allfinancialmatters puts together a great visual representation of this principle annually. 

You can see a more easily readable pdf here. The real takeaway is how much the colors move around and you can get that from the image above. This past year, the highest performing of the twelve sectors was Consumer Services at 42.17%. In the years since 2000 it has finished, 10th (in 2000), 1, 9, 4, 10, 11, 9, 11, 4, 3, 3, 4, and 2 (in 2012) respectively. Remember, since there are only 12 candidates, 10 is really bad. Sectors have enormous year-to-year variation, you can see that above.