You are employing sector rotation and you are now reallocating your portfolio ou

Question

You are employing sector rotation and you are now reallocating your portfolio out of industrials and energy stocks and into pharmaceutical and medical supply firms along with retail discounters like Wal-Mart and Costco. For your strategy to make sense you must believe the economy is

in an expansion

in a contraction

at a peak

at a trough

You are employing sector rotation and you are now reallocating your portfolio out of industrials and energy stocks and into pharmaceutical and medical supply firms along with retail discounters like Wal-Mart and Costco. For your strategy to make sense you must believe the economy is

Explanation / Answer

Answer: in a contraction

Explanation: Only when the economy is contracting would you remove money from industrials and energy and invest in safe sectors like Pharma and Retail since these do not fall as much in a contracting phase.

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