How To Pick A Sector ETF

Sector investing is popular, and we’ve been hearing a lot about sector rotation opportunities in the face of changing correlations since President Trump’s victory last year. But as an investor, how do you know when it’s time to get in or out of a sector? How do you pick the best sector to be in?

Unfortunately, there’s no single recipe that works here. Different investors look at different metrics and go about it in different ways in their hunt for the best sector for maximum return and minimum risk—price momentum, historical relative performance, job market trends, changes in volatility, volume, GDP data, etc.

 

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