I’m basically write out this bla bla bla to help get my thoughts together, and any one can profit from it by following or lose if they don’t know what they are doing.
There are two different sectors that I like to watch because it tells me what the hell people are doing, and most of all what they are buying, what companies they are buying from, and if there is some kind of bad thing going on in the world some where.
XLY CONSUMER DISCRETIONARY: Industries such as retail, automobiles and components, consumer durables, apparel, hotels, and restaurants are primarily represented in this sector. The Index includes Amazon, Home Depot, McDonald’s, Nike and Ford.
XLP CONSUMER STAPLES: The companies in this sector are primarily involved in the development and production of consumer products that cover food and drug retailing, beverages, food products, tobacco, household products, and personal products. Component stocks include Proctor & Gamble, Philip Morris International, Coca-Cola and Pepsi.
What one can find most interesting is one “XLP” will follow the other “XLY” in going up or coming down in value. As the Pro’s say over bought or over sold.
Ways to profit on these ETF’s can be easy and fun once you study them for a time.
“XLY” will cost a little more then buying in on “XLP”, and it moves faster then the other. The chance of losing can also happen if you don’t keep an eye on it where “XLP” has the tendency to move slow with less loss giving you time should it shift direction.
When looking at the price of some of the names I have mentioned… their price in stock is much higher then buying into “XLY” and “XLP” reason being they are basically used as an over sight or gauge to a rather large range of industry.
Much like “XLF” sector covers Financial, and “XLK” sector covers Technology.
Why are sectors important… take the vaccine that’s coming; there are many companies in the race to get the money, and the vaccine needs to work to include government testing regardless of the speed it most be produced.
So how do climb on board, and make money? It becomes a crap shoot to pick the right company or lose your bank roll. With picking the sector you may not make as much as the direct pick of “The” company, but the sector will have the company within it’s listing. That will put money in your pocket.
Reminds me of a story I once heard about the gold miners. You can pick the right spot of land that might have gold on it, and try your luck in hitting it big time OR you can run the General Store and make the money from supplying the gold diggers.
How’s your luck?