Which sector will outperform in 2017 ?

2016 has come to an end, it was a year of many predictions, but some outperformed than others, here are the list of many sectors as they ended 2016 :

Nasdaq     UP         7.64%

GLD        UP          8.03%

S&P 500 UP           9.54%

Dow        UP          13.4%

RUT        UP          19.48%

XLF        UP          20.09%

XLE        UP          24.87%

SOX        UP          36.62%

It is important that we get sector focus in looking ahead to 2017.

IF we look @ current environment of infrastructure spending, trade tension and deregulation, it is a fair assumption that some sector will benefit and some will get hurt.

Nasdaq may be the most affected by trade tension when tit for tat regulations will play out, so expect Nasdaq as an index to under perform and may be the weakest, yes there may be few stocks like AMD and some Chinese stocks whose business are solely in China or non-US based, may benefit.

XLF is expected to come out of multi year slump and may continue to outperform for several years, thus a very good bet.

XLE may continue to reward investors as Oil prices has firmed up and $60 is a good target for 2017.

GLD should benefit as trillions in borrowing for infrastructure spending fuels inflation.

RUT is also a good place where many base metals companies are benefiting from higher Copper, Zinc,Meth coal, Steels and other metals......

Based on how i see TAPE unfolding in 2017, it may be wise to underweight SOX, DOW, S&P 500 and Nasdaq......

As was the case in 2016, only few sector will carry this market in 2017.

About market, i expect market to correct somewhat after January 20th inauguration and hopefully will find support in 5 to 7% correction.

It is important to ignore pundits who are stuck in famous technology names, they will lag sectors identified above.

SO....2017 is here, adjust your portfolio to reflect what will work in 2017.

Good luck with your own analysis and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed