I agree, many of the techs were running on momentum, and when some of the funds pulled out momentum moved from the techs to the cyclicals. Can't blame Fidelity for taking money off the table, since they are in a highly competitive business, and quarterly/yearly performance is the only thing that counts. As for individual investors, most of us lack the info or are not quick enough to make those rotations back and forth. So I leave that to the pros, and just hang in with my AOL, which I have held through the ups and downs and has outperformed any of the Fidelity funds by a wide margin. But then, I have about a 3-5 year horizon.
Now, if I were playing mo on the cyclicals, I would be concerned about earnings. To play those stocks you have to bet that (1) they can execute, (2) the economy stays strong, (3) interest rates remain low, and (4) the rest of the world cooperates. In techs, at least in AOL, only (1) and (3) are of prime importance. (2) also plays, but to a lesser degree.
BTW, CNBC just reported that the Dow is 20% above its 200 DMA. How long can it stay there? |
