Hi Allen, Re: Sector ETF and starting AIM when things are out of favor.........
Here's a really handy screen from StockCharts:
http://stockcharts.com/freecharts/perf.php?[SECT]
It shows the major business sectors all in one interactive chart. Note that you can change the X-axis to be the time frame in which you are interested. By clicking on the S&P 500 (first box at top) and making it gray, you can see the various sectors relative to the S&P. Right now if you were to set it for different time frames, this is what you'd find:
Sectors relative to the S&P500 Index................
Sector 65 Days Year To Date Year over Year
Staples flat flat down
Cyclicals up down down
Energy down down down
Utilities down up flat
Industrials down down flat
Financials up flat flat
Info Tech up up up
Healthcare up up up
Materials flat up up
It shows Cyclicals, Staples and Energy being underperformers compared to the S&P500. This is only Relative Performance in this view. Of course you can expand the X-axis further to see longer term trends for all the sectors, but it can get a bit confusing.
If you unclick the S&P button at the top, you'll see that all sectors are up year over year (253 days on the X-axis), so that chart above can be deceiving. While Cyclicals, Energy adn Staples are all underperforming the S&P 500 Index, they are all up nicely from a year ago.
Sectors relative to their price one year ago...........
Sector 65 Days Year To Date Year over Year
Staples up up up
Cyclicals up up up
Energy down up up
Utilities down up up
Industrials down up up
Financials up up up
Info Tech up up up
Healthcare up up up
Materials up up up
Traditional sector rebalancing can suffer from such deception. Shifting back to equal weight at this point would have someone buying more shares of Energy even though it is up for the last 12 months! The nice thing about AIM is that it won't let you do such things. AIM will only buy more Energy under circumstances where Energy is down relative to its starting point or down from its most recent selling point.
Maybe this will be of some value going forward as to selecting what might be the best candidate at the time when you're ready to invest.
