As we enter the last days of the year, investors are beginning to focus on value and momentum in the markets. With the stock market near all-time highs, conventional wisdom is that value stocks will continue to outperform growth stocks, and momentum stocks will continue to lead the market. Seeking value and momentum in accordance with the market trends can help investors capitalize on further upside potential as the rally progresses.
The healthcare sector is one of the sectors to watch this year-end. The enactment of the Affordable Care Act in 2010 has concentrated more resources, attention, and research into the healthcare sector, making it an attractive value investment. Furthermore, a correlation exists between an improving economic environment and the healthcare sector, as more consumers have disposable income to purchase healthcare services. The healthcare sector also boasts strong momentum, with many stocks in the sector trading well above their 200-day moving averages and poised for further growth.
The consumer discretionary sector is another sector to watch as the rally progresses. This sector has a strong correlation with an improving economic environment, as more consumers have disposable income to purchase non-essential goods and services. Furthermore, the sector has seen strong momentum in recent months, as evidenced by many stocks in the sector trading well above their 200-day moving averages. Investors should look for companies that have strong balance sheets and continue to generate profits.
Finally, the technology sector is another sector to watch. With the increasing prevalence of tablets, smartphones, and other mobile devices, this sector is poised for further growth. Many of the stocks in the sector have seen strong momentum in recent months, and are remaining relatively resilient to global macroeconomic conditions. Furthermore, the sector is an attractive value investment, as many technology companies boast strong balance sheets and continue to generate profits.
In conclusion, seeking value and momentum in accordance with the latest market trends can help investors capitalize on further upside potential as the rally progresses. Healthcare, consumer discretionary, and technology are three sectors that investors should watch closely. With further economic recovery and technological advancements continuing to drive growth, these sectors are poised to outperform in the coming year.