It's a Material World

JC Parets
February 25, 2023

In some market environments Technology, and other sectors full of growth stocks, tend to outperform.

Usually interest rates are falling in that type of market.

You got a good dose of that for about decade.

US Stocks were the global leaders while Europe and other parts of the world, without that exposure to growth, made little progress.

See here.

And now with interest rates rising, other sectors have emerged as leaders. Industrials, for example.

This is all perfectly normal for this type of environment. We've seen it before, and to expect anything else would be irresponsible.

There was a time where Tech stocks were the leadership group.

That time is behind us.

You could wish and pray and hope that it becomes that environment once again.

Or you can live in reality.

That's up to you.

Look at Materials, for example, holding above all that former support from the past couple years. If $XLB is above 80, this is sector we need to own:

Materials are a sector that should do well in a rising rate environment.

And as it turns out, rates have been rising.

And this sector is doing well.

Look at its largest component going out at new all-time highs this week:

The United Kingdom has a 0% weighting to Tech stocks.

It is also making new all-time highs.

There's a time and a place for everything.

The details of our $LIN trade is listed on our Trade Ideas page and our NEW Rangefinder App.

Not every stock we own needs to be headquartered in silicon valley. They can be British and still trade on the NYSE.

In fact, in this environment, it continues to pay much better to own stocks that are NOT headquartered in California, but in other, less growth-heavy countries.

Please let me know if you have any questions.

Also make sure to catch up on this week's LIVE Conference Call.

- JC

 

 

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