I believe in being focused in the best areas of the market at any given point in time. Currently, the leading sectors in the market continue to be, internet, biotech, and pharmaceuticals. And recently a new leadership sector has entered into the fray: Oil and Gas Exploration stocks.
This is my current top eight-ranked sectors out of the 60 that I monitor. The ranking is based on short-term, intermediate term, and long-term performance.
The one year performance of the sector is shown in the chart below of the exchange-traded fund, XOP, which I use as a proxy to track the sector.
I have had heavy exposure to the pharmaceuticals and tech stocks all year long. That has really helped my performance, as this has been a very narrow market in 2013.
If you have not been 100% in U.S. equities this year, you have suffered.
More specifically, if you have not been in small and mid-cap U.S. equities this year it has hurt your overall performance.
And even more specific yet, if you have had heavy exposure to the pharmaceutical, biotech, and tech stocks, you have not had as good of a year as you could have.
Well, now we have a new leading sector showing up on the scene and I have been increasing my exposure to it.
I cannot give you the exact reason why the Oil and Gas Exploration sector has exploded all of a sudden. But, I can give you numerous examples of individual stocks like BCEI, HP, and PXD breaking out all over the place.
I have recently added EOG Resources to the Conservative Growth portfolios that I manage.
This $50 billion dollar market cap company is in Houston, Texas. It is sure doing a whole lot better than the Houston Texans football team this year!
EOG engages in the production and marketing of crude oil and natural gas in the US, Canada, Trinidad, the UK, and China. Over the last few years this stock has been booming—it was trading at only $45 in 2009 and today it is at $185 per share.
Let’s take a look at the performance of EOG:
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