Stock Sectors Are Risky Bets, Rising and Falling Frequently

The returns for 2020 and 2021 followed a familiar pattern. One year’s winning investment picks were losers the next year.

Chasing one year’s hot market sectors often means losing money in the next year.

That’s an old lesson in investing, and it has been borne out once again.

Stock sectors that were big losers in 2020 soared in 2021 to become the year’s biggest winners, while the highfliers of the previous year posted returns that ranged from mediocre to awful.

There are 11 sectors in the benchmark S&P 500 stock index: information technology, health care, financials, consumer discretionary, communication services, industrials, consumer staples, energy, utilities, real estate and materials.

They rise and fall with disturbing regularity.

The big winner in 2020 was the consumer discretionary sector, with companies like Amazon.com, Tesla, Home Depot and Nike. It returned 58 percent, including dividends, that year but only 19 percent in 2021, the third-worst of all sectors. That was

Keep reading this article on The New York Times Business.

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