If today’s 397-point (5%) surge in the Dow Jones Industrial Average (^DJI) put you in a buying mood, Bespoke Investments Group (BIG) has offered up a plan for which industries will do well coming out of a bear market. BIG looked at data for ten sectors going back to 1960 and found that, Surprise!, on a scale of 1 to 10, one being the best, financial stocks do the best in the three months following a bear market, at 3.5, and tech is second, at 4.4, followed by consumer discretionary goods, and healthcare. Energy stocks have had the worse ranking, typically, following a bear market, at 7.8, and a typical return in the three months following of 13.16%. Financials should be even stronger when the recovery comes, says BIG, because the group has also been the worst performer during the current bear market, and the worst performing sector in all bear markets going back to 1960 has, historically, been the best performer afterward, with a 20.8% average return during those three months.
Question, of course, is Are we out of the woods. No comment by BIG on that score… |
