An Easy Way To Use ETFs For Sector Rotation Strategies

| January 4, 2014 | 0 Comments

inflows and outflowsThe results are in… 2013 was a fantastic year for stocks. 

Just look at these impressive returns from the major indices.  The Dow is up 30%, the S&P 500 is up about 32%, the S&P mid-Cap 400 gained 33%, and the Russell 2000 is up nearly 40%!

Needless to say, those are some impressive returns.  But you can’t simply bank on another year of 30% gains for stocks in 2014.

In fact, I think we’ll be lucky to see the S&P 500 scratch out a 10% gain this year.

Here’s the thing…

I’m not satisfied with simply getting whatever gains the S&P 500 gives me.  I use a sector rotation strategy when buying and selling ETFs to take gains that beat the market.

My philosophy is simple – Buy into specific sectors and industries that are in favor with investors and sell those that aren’t. 

This type of strategy appeals to me because it blends active management and long-term investing.  It takes into account that different sectors of the economy don’t move together in lockstep. 

For example, there will periods of time when technology stocks are hot and consumer stocks are not.  And there will be times when consumer stocks are hot and technology stocks are not.

Rotating out of sector ETFs that are out of favor with investors and into those that are in favor gives you the ability to outperform the market.  It’s a simple strategy, but executing a successful sector rotation strategy is no easy task. 

I start by analyzing boatloads of economic data, historical data, and charts of indices, ETFs, commodities, and just about everything else.  And I spend endless hours digging through the details and figuring out what ETFs are primed to skyrocket. 

You see, I do all of this because I’m fascinated by the markets… and I love making money.

And in order to keep track of all of my research, I began writing down and compiling the data in a journal years ago.  The process of writing it down and seeing it in print helps me cultivate the ideas I have rattling around in my head into actions. 

I’ve been sharing these insights with subscribers to Sector ETF Trader since 2009.

At its core, Sector ETF Trader is about taking a mountain of data and drilling down to get the one or two ETFs with the best opportunity for immediate profit.

And here’s the best part…

I believe the conditions are right for sector rotation strategies to crush the performance of the S&P 500 in 2014.   If you’d like to join me on my quest to beat the markets again in 2014, you can subscribe to Sector ETF Trader right here…

Good Investing,

Corey Williams

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Category: ETFs, Sector ETFs, What's Going On?

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets three times a week. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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