Today is not very fun.
(2007-08-06 17:55:58)
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The stock market had a big day. But both my stock portfolio and mutual fund portfolio underperformed by a wide margin. This year\'s biggest laggard, the financial sector, had a wonderful day, with XLF gaining more than 5%!
Sector rotation usually happens with corrections and sell offs. If the financial sector can continue to outperform, we could have very good year since it is the most dominant sector in the SP500 index. But one day doesn\'t make a trend. We need to follow the development closely in the next few weeks.
Many technical indicators showed last Friday that the market was oversold. And it was time to get in and buy some stocks or mutual funds. But most people were in shock and fear mood and didn\'t have the guts to do that. That\'s the main reason why most people can\'t beat the market.
When sector rotation is going on in a volatile market, trading index ETFs may be the safest way to play the market. I may sell the stocks in my IRA accounts and exchange for ETFs in the next few days.
Hope tomorrow will be my day again. Go market!