Investment du jour

At times it can be tempting to get caught up with the crowd and excitement when certain parts of the market soar based on a analyst report or trend. While great potential may exist, sector investing can also come with great risk.

If you take a look at the image below, you’ll notice that what is hot one year isn’t always hot the next. Interested investors should be willing to follow a sector’s ups and downs, as timing the market is difficult. Investing in specific sectors can add volatility to a portfolio, but exposure to the right sectors can contribute to improved financial performance. Keep in mind that while sector investing can fill a gap or serve as a speculative play, a balanced asset allocation should be the core of any portfolio.