Anyone got an explanation for why Financials are so favored today?
A few things- 1 January Effect......bonuses, stock options and end of year dividends getting reinvested
2- Fund managers scared of missing the boat are piling into last year's top performers
3- Wednesday's action was the ringing of the dinner bell for retail investors to come back into the game. Retail investors look at tech and financials first because they are not complex enough to look at sectors like pharma, energy, consumer cyclical ect....
As far as number 3 goes, we are now entering the phase in this bull market where institutional investors that have built up massive long positions over the last 4 plus years will begin winding down those positions to retail investors and funds that cater to retail investors. This process may go on for sometime, but eventually a 20-35% correction will unfold leaving retail holdig the bag once again.
Rinse and repeat....this is my third go around. They got me the first time (1999-2000) I was 21 years old and dumb as young. I was more ready for their game in 2008, was able to hold onto to some profits....this time I plan to make my fortune by profiting on the short side!