Different Minds: 2nd Edition
Welcome back to Different Minds. This is the second edition of the series and hopefully there will be many more. I have gotten a lot of great feedback about this idea and hopefully that will carry the momentum going forward. This week we have some new investors taking part in Different Minds. First up we have Stefan, followed by Brian and then we have The Wealth Junkie. All 3 investors have some great websites that I recommend everyone checking out. A lot has been going on in the world of investing. Wells Fargo is getting fined $185 million, the iPhone7 has made its appearance, the stock market is starting to lean towards the possibility of a rate hike and much more. Volatility always creates buying opportunities so there is one question that some people have been wondering…..
What sector has been under performing but has the potential to outperform moving forward and why?
I think the financial sector has been underperforming the overall market and has the potential to outperform moving forward. The biggest catalyst for this is interest rates rising in the future. Obviously nobody knows when the Fed will raise rates but at some point they will have to and these undervalued stocks will rise. Right now is a great time for dividend growth investors as these depressed prices allow us to get a great yeild.
Stefan from TheMillennialBudget.com
I have no idea. That’s the simple answer. My reason is either more complex or simpler, depending on your viewpoint. You see, I don’t track the market…at all. I have no idea whether the Dow Jones jumped up 2% in a day or dropped 7%. No clue. Tracking the market and listening to the talking heads in the news does absolutely nothing for me. So I stopped watching, stopped reading, and in general, stopped consuming media garbage….. The point is that I don’t track sectors or markets. I only track individual stocks that fit my current investing criteria. Same for all other investments, like real estate and note investing. Each investment is unique.
Brain from massivedebttomogul.com
Over the past 52 weeks every sector has seen positive gains, including health care. Consumer staples, industrials, materials, and the technology sectors have even seen gains above 10%. A sector that has been underperforming its historic performance and the year over year gains of 8% from the S&P 500, is the Financials sector. Stocks within the Financials sector tend to be more affected by the emotions of the market. When there are national events that may influence the entire economy, financial stocks are traded heavily. Now with the child’s play from the Federal Reserve on interest rates going on, investors aren’t sure what to do with these stocks. The decision the Fed ultimately makes will impact banks, mortgage lenders, insurance companies, and all. So until they do, we can assure the Financials sector will remain stagnant Watch the months after a decision is made and investors remember the value of this sector, how it will keep up with the overall S&P 500 returns versus the lagging 3% return today. This sector has some of the strongest return on assets and equity corporations in the market. More than other sectors, Financials are influenced by market emotions as opposed to macroeconomics. Financials will bounce back in due time.
The Wealth Junkie from thewealthjunkie.com
That concludes this weeks edition of Different Minds. I would like to thank everyone who contributed to the 2nd installment of Different Minds. I hope that everyone enjoyed the different insights about which sector has the potential to show some big gains. It appears to me that investors are really looking for Financials to outperform moving forward. Are you positioned to benefit from Financials if they do start to improve? If you would like to weigh in on the subject then please feel free to leave a comment below. If you are interested in being featured in an upcoming edition of Different Minds than just jump on over to my Contact Me page and send me a message. Until next time happy investing!
I couldn’t agree with the Wealth Junkies post more. The fed is killing the financial sector with all the uncertainty.
Divi Cents recently posted…Do You Dare Do Something Different
Financial sector has definitely been down recently. Their are some great banks and insurance companies available right now!
Dividend Diplomats recently posted…Recent Buy – Cardinal Health, Inc. (CAH)
Earlier this year I was fortunate enough to jump in the energy sector after it had been beaten down last year. The financial sector might be a great play if it stays down due to the uncertainty with the Fed. Who would have thought the Fed would keep interest rates this low for so long? I definitely didn’t see it.
Mustard Seed Money recently posted…The Ins and Outs of Car Insurance
Congrats on picking up some energy stocks. I thought after they raised rates last December that they would have raised them higher by now…. but I think they will pull the trigger tomorrow and raise them. It will definitely be interesting when they do raise them again. Thanks for stopping by!